A payee is a person or organization that receives payment for goods or services. Learn more about payees and how they work. Payees receive funds from a payer. Payment can be in any form, including cash, a check, a money order, or an electronic transfer of funds. Payees can be friends you pay through Venmo, service providers you pay for insurance and utilities, merchants, or anyone else you need to pay.
You typically encounter payees when banking. On a check, the payee is the person or organization to whom the check is written. For online payments, you provide payee or recipient information when setting up automatic transfers. They can deposit it, cash it, or potentially sign it over to somebody else.
For example, on your paycheck or any other check you receive , you should see your name written on the check because you are the payee. If you write a check to pay rent, your landlord is the payee, so you write your landlord's name or the business name on the check. Providing payee information tells your bank who receives the money and where to send the check or electronic payment. You may need to provide additional details, like your address or account number, so the utility company can apply the payment to your account.
When somebody uses a check or money order for payment, the payee typically must endorse the check by signing or stamping the back of the check. A domestic account transfer is one which involves the transfer of funds to an account that is held with another bank within the same country.
The following steps are applicable for domestic account payee creation if the geographical region configured is India. The following options appear as per India region configuration:. The following details are displayed per record as search results arrived at based on the information defined in the search fields.
The IFSC code value. This value will be displayed as a link which will be selectable. The details of the bank that include the IFSC Code as well as the name and address of the bank and branch in which the payees account is held. The following steps are applicable for domestic account payee creation if the geographical region configured is the UK.
The following fields are applicable if either of the two options, Non-Urgent or Faster are selected as Payment Type. The following fields are displayed on a pop up window if the Lookup Sort Code link is selected. The Sort Code value. On selecting the link, the Sort code and bank details are populated on the Add Payee — Domestic Account screen. The following fields are applicable if the option Urgent is selected as Payment Type.
Click the Back to Dashboard link, to navigate to the dashboard. The following steps are applicable for domestic account payee creation if the geographical region configured is any of the member states that comprises the European Union. The BIC Code value. An international fund transfer involves the transfer of funds to an account that is maintained outside the country and beyond geographical boundaries.
Select the network through which the transfer is to take place. The following fields appear on a pop up window if the Lookup National Clearing Code link is selected.
The facility to search for the national clearing code by type. The facility to search for bank details by defining the national clearing code. The facility to search for the national clearing code by defining the name of the bank. The facility to search for the national clearing code by city.
Below fields appears if the Bank Details option is selected in Pay Via field. Complete address of the bank at which the payee account is held. Note: For more information on managing payee, click here. Copyright Information. Payees may also be more than one party. This typically happens in electronic transfers when a person withdraws money from the payer's account and splits it into a variety of payee allocations. Depending on the banking institution, these types of transactions may have approval requirements for numbers, percentages, and types of accounts.
Sometimes, the payee and payer may be the same party. This can occur when a person writes checks, makes withdrawals and deposits, or electronically transfers funds from one of their accounts to another. It is a good practice to ensure that the payer and the payee are in agreement on the amount being transferred between parties to avoid disputes.
The SSA outlines an entire process on how to become a representative payee, what the duties are, and how the process should be managed and reported. A representative payee has rights and powers similar to that of a conventional payee, but a representative payee must manage money for the benefit of the actual beneficiary.
Funds must be spent on or saved for only in ways that help the beneficiary. In this aspect, the representative is acting as the fiduciary to the actual payee. Representative payees exist to take the burden of money management off the beneficiary's plate. An effective representative payee should improve the beneficiary's life.
If a representative payee is doing something that works against an ultimate beneficiary, the Social Security Administration should be immediately notified. Social Security. Checking Accounts. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. The payee meaning can also be applied to investors. If a customer wants to contribute to their own pension plan, they might authorise a transfer from their everyday banking account to the investment management company.
The bank then receives the payee request with the details of where this payment will go. Situations often arise where there might be more than one payee for a single transfer. With electronic banking transfers, an individual might transfer a single sum of money from his or her own payer account.
This can then be split into different allocated payee accounts. Each bank has its own approval process for split transactions with multiple payees.
A confirmation of payee service is used to protect businesses against common scams including authorised push payment fraud. Confirmation of payee can apply to online payments, mobile payments, and in-person transactions between UK bank accounts. The bank runs some basic checks to make sure the account details provided match those held by the payee. As you can see, the term payee is a simple concept in banking and finance, though it can be applied to numerous situations.
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