Payment order is a term that is used internationally for instructing banks/other financial institutions to make payment or series of payments to third party. Instructions can be given in the form of paper or/and electronic means. A payment order is also called as banker’s cheque and payable at the issuing bank. It is issued for the local/international use and its payment depends upon the vicinity prospects.
There are following conditions in favor of instruction:-
When you post a payment order, the system generates payment items from the payment order items/positions that are updated on the respective accounts as specified in the order. A payment order is only a group of payment items, and does not actually represent a posting. A payment order always has a balance of zero.
Types of Payment orders: - There are various types of payment orders:-