What is Payment Order definition/concept

Economic transactions or payments can be carried out through various systems: by traditional cash , by debit or credit cards , by transfer or money order. These modalities are used in one way or another depending on the needs of each individual and the circumstances related to each payment. Payment Order

A money order (also known as a cashier’s check) involves sending money from one person to another through a check issued by the bank (the issuing bank). The check or order issued must comply with certain requirements: have the name of the bank and the specific branch, the value of the money, the identity of the beneficiary and sender, the account and bank number where the funds will be sent and a series of security measures in the form of documents (certain brands, inks and threads).

The purpose of the payment order is to ensure customer safety and prevent the use of physical currency. This system is typically used for international operations, for example, for a parent who sends money to their child who is studying abroad or for an immigrant who sends money to their home country.

Payment Order Types

There is no single type of payment order. In fact, there are some variations:

– The international check is issued in the local currency, although the most common is the dollar. It is a personal check issued by an individual, that is, a physical person.

– A commercial order is very similar to a conventional check and is usually issued by an entity or company that sends a sum of money to a bank account in another country.

– A cross payment order consists of an issued document that has two stripes or lines between the name of the recipient bank that will be charged so that this entity can facilitate payment through a checking account and never in cash.

In any case, it is recommended that the payment order be requested in advance in  writing from the issuing bank, that it made a copy of the document to have a receipt and that it do some kind of follow-up (such as faxing) to facilitate its receipt by of the beneficiary.

Currently, the payment order is in disuse, as it has been replaced by a similar operation: the transfer.

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