In banking, a pay order is a rough negotiable draft that instructs a bank to pay a certain sum of money to a third party that may or may not be involved with the bank. A bank pay order is similar to a check, but it is negotiable unlike a check.Continue Reading
A person may want to submit a pay order when he or she wants to pay someone or a company without the use of a personal check. A pay order is sometimes more reliable than a personal check because it is nearly always negotiable by the payer, the third party and the bank. Payment orders can be set up in a series or can be issued one time. They are ideal for paying bills in an online setting and are most often used for recurring payments. A bank will connect with the third party and will automatically deduct the amount of money that is owed to a third party on a recurring date.
In comparison, a bank account holder issues a stop payment order when he chooses to prevent access to his account. The stop payment order will prevent the third party from accessing any more money in the person's account. Stop payment orders are generally used when people no longer have a need for a certain bill or third party.Learn more about Personal Banking