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A 'payment' is the transfer of wealth from one party (such as a person or company) to another. A payment is usually made in exchange for the provision of goods, services, or both, or to fulfill a legal obligation.
The simplest and oldest form of payment is barter, the exchange of one good or service for another. In the modern world, common means of payment by an individual include money, check, debit, credit, or bank transfer, and in trade such payments are frequently preceded by an invoice or result in a receipt. However, there are no arbitrary limits on the form a payment can take and thus in complex transactions between businesses, payments may take the form of stock or other more complicated arrangements.
In law, the 'payer' is the party making a payment while the 'payee' is the party receiving the payment.

Contents

Number of parties

Global payments market

See also

Audio media

Number of parties

Payments may be classified by the number of parties involved to consummate a transaction. For example, a credit card transaction in the United States requires a minimum of four parties (the purchaser, the seller, the issuing bank, and the acquiring bank). A cash payment requires a minimum of three parties (the seller, the purchaser, and the issuer of the currency). A barter payment requires a minimum of two parties (the purchaser and the seller).

Global payments market

In 2005, an estimated $40 trillion globally passed through some type of payment system. Roughly $12 trillion of that was transacted through various credit cards, mostly the 21,000 member banks of VISA and MasterCard.
Processing payments, including the extending of credit, produced close to $500 billion in revenue. (Source: McKinsey and Company, 2006)

★ Debit Cards
In the U.S., debit cards are the fastest growing payment technology. In 2001, debit cards accounted for 9 percent of all purchase transactions, and this is expected to double to 18.82 percent in 2011 (Source: The Nilson Report, Issue 761, April 2002)

★ Checks
Historically, checks have been one of the primary means of payment for purchasing goods and services in the U.S. In 2001, checks accounted for 25 percent of the U.S.-based payment mix; in 2006, this is projected at 17 percent (Source: The Nilson Report)

See also

★ APACS (The UK Payments Association)

★ Trade

★ Financial transaction

★ Money

★ Accounting

★ Commerce

★ Business

Audio media

★ Leading European Bankers and payments experts discuss a changing regulatory and cross-border landscape for financial payments in light of SEPA Single Euro Payments Area