Who is Payee?
A payee is one who gets paid in a transaction of goods or services. The payee receives money from a payer, who can pay by cash, check, or other methods. The payer gets goods or services in exchange. The bill of exchange has the payee's name on it, and it can be a person or an entity like a business, trust, or custodian.
Understanding a Payee
A payee is someone who gets paid for goods or services. A payer is someone who pays for goods or services. They must exchange something of value, usually money, for the transaction to happen. The payee needs to have a bank account that works well and can accept money from the payer. This is not needed if they use cash.
A payee can also get money from a promise to pay. This is called a promissory note. The payer is the one who makes the promise to pay. Another example is when a payee gets money from a bond coupon. The payer is the one who issues the bond.
A payee can be more than one person or entity in some cases. For example, when someone transfers money electronically from their own account to different payee accounts, they may need to meet certain criteria for numbers, percentages, and types of accounts, depending on the bank.
A payee can also be the same as the payer in some situations. This happens when someone writes a check to themselves, withdraws or deposits money, or moves funds electronically from one account to another.
To avoid conflicts, it is advisable to ensure that the payer and the payee agree on the amount of money being transferred between them.