What is Payment?
When you make a purchase, you transfer payment, which can take various forms. In a barter system, payment involves exchanging goods or services for other goods or services. Ever been to a market in India? If so, you've probably used UPI, cash, debit cards, or credit cards to make your purchases, right? Well, those are some of the most common payment methods around here. And guess what? Stocks and bonds can also join the party as forms of payment in many instances.
How Payment Works
Generally, businesses (payees) have the authority to decide the mode of payment they prefer, such as cash, credit card, etc. Nonetheless, the law usually mandates that they accept the country's official currency (legal tender) up to a specific amount. Payments are typically made in the local currency of the business unless there's a mutual agreement to use another currency. In cases where payment needs to be made in a different currency, a foreign exchange transaction becomes necessary.
Businesses may exhibit flexibility regarding your debt. They might accept a partial payment as full settlement, provide a discount for paying in cash or for prompt payment, and so forth. Conversely, they might impose a fee for late payments or for using a particular credit card.
A debt is considered settled once the business accepts your payment. As a borrower, you cannot unreasonably refuse a payment from someone trying to repay you, though exceptions may apply, such as attempts to pay on a Sunday or outside business hours. Generally, businesses are obligated to accept your payment and furnish a receipt as proof of the transaction.