Context

In American Express payment and account systems, concurrent updates to balances, authorizations, and ledger entries must be handled safely. Interviewers ask this to assess whether you understand how databases prevent lost updates and inconsistent transaction states.

Core Question

Explain the difference between optimistic locking and pessimistic locking in the context of a banking transaction. Your answer should cover:

1. How each locking approach works
2. What problem each approach is trying to prevent
3. When you would choose one over the other in a financial system such as American Express
4. The tradeoffs in concurrency, latency, retries, and data consistency
5. How PostgreSQL features such as row locks or version checks support each pattern

Scope Guidance

Keep the discussion practical rather than academic. The interviewer expects you to connect the concepts to real transaction flows like debits, credits, balance updates, or payment authorization, and to explain why one approach may be safer or more scalable depending on contention levels.