What is pay order

Negotiable instrument (such as a draft) which instructs a payer bank to pay a certain sum to a third party. Also called pay to order.

Source: http://www.businessdictionary.com

Payment order, in international banking, is a directive to a bank from a bank account holder instructing the bank to make a payment or series of payments to a third party.

Payment orders are post-contract instruments often used to pay fee agreements to agents and usually contain conditions for the payment to be met such as successful completion of contract requirements

Payment orders with “conditions” should not be confused with “conditional payment orders”. Conditional payment orders are pre-contract instruments consisting of a documented fee agreement between the beneficiary and the payer, proof of ability for the payer to pay which is often issued by Swift MT799 to the recipient’s bank, and occasionally may include bank instructions for the establishment of a payment order following contract execution. Either payment orders or conditional payment orders are assumed to be irrevocable unless otherwise stated.

Payment orders with conditions may be established after signing of a contract and posting of a letter of credit or other financial instrument with the paying bank but are never put in place prior to contract execution because of the risk that the contract will not materialize. Source- wikipdia

 

Pay Order or Banker’s Cheque The payment order is a financial instrument issued by the bank on behalf of customer stating an order to pay a specified amount to a specified person within the same city. In payment order is pre-printed with the word “Not Negotiable” . There is no chance of dishonoring as the amount is prepaid. Once issued Pay order will be valid for 3 months. Source- Goodreads

 

Pay order is a financial instrument often used to pay fee agreements to agents and usually contain conditions for the payment to be met such as successful completion of contract requirements.

In payment order is pre-printed with the word “Not Negotiable” . There is no chance of dishonoring as the amount is prepaid. Once issued Pay order will be valid for 3 months. Conditional payment orders are pre-contract instruments consisting of a documented fee agreement between the beneficiary and the payer. Source- Quora

 

What is demand draft and pay order?

Demand draft is a prepaid cheque drawn by a branch of a bank on the banks branch in different city while PO/BANKERS CHEQUE is payable localy or in the same city.