A payment instrument is electronic or paper-based means or mechanism through which money is transferred from one party to another. Payment instruments can take various forms such as a loan, an account, a credit card, or a debit card. Payment instruments also include electronic forms of payment and other forms of transactions, such as check and ATM withdrawal. In simple terms, the term ‘payment’ refers to the transfer of money from one place to another.
Payment instruments have the following five major purposes:
Financial institutions are the major users of payment instruments and these include banks, finance companies, lending institutions, and moneylenders. The major purposes for which they make use of these instruments are:
Banks make use of these instruments for the purpose of issuing loans. There are various types of financial instruments that banks issue and this include: checks, savings accounts, debits, and loans. When you want to avail of a certain type of loan, you can apply for it either through direct application or through an online application. Many people prefer to apply online, since online applications are much quicker and secure.
Finance companies are the major consumers of payment instruments and they offer different kinds of services to the customers, such as loans, credit cards, savings accounts, and checks. Some of the common financial instruments that finance companies issue include: saving accounts, credit cards, store credits, store deposits, store vouchers, and store credit.
Credit card providers offer different types of credit cards and the main purpose behind such a move is to give the customers the opportunity to purchase goods and services online, without worrying about their credit ratings or about their credibility in terms of payment history. These credit-card providers issue card holders with a card with varying amounts of money and depending on the amount that is given out to the card holder, the customer can either use the card to purchase goods online, or use it for shopping online.
An account holder can also opt for a debit card and use this card to withdraw cash from a bank or to pay bills or to make payments online. Some credit card issuers provide debit card services and charge a fee for debit cards. A debit card can be used for making online payments.
Moneylenders also use these instruments in order to provide services like: merchant accounts, credit card and debit card accounts, credit card services, and ATM card services, e.g. They provide a variety of services for the customers and they make use of these instruments for various reasons and purposes. There are various other ways that these instruments can be used by the customers, such as: providing access to certain types of services and functions (e.g., check cashing, ATM, debit card machines). Also, a bank can use these instruments to conduct various online transactions, such as processing online payments.
There are many different types of payment instruments that are being used by banks, including: online payday loans, credit card and debit card accounts, store and credit card facilities, online banking, etc. In addition, some credit card providers provide a money transfer service, where the customer transfers funds from one bank account to another bank account. This can be used for various purposes, including: transferring funds between the bank accounts, transferring funds between checking accounts, transferring funds between retirement account accounts and other specialized accounts such as savings and investment accounts.
Many people prefer online transactions, since they find it more convenient and safe than manual transactions. This is especially true in terms of security, since a computer is the most commonly used means of conducting a transaction and online transactions are much safer than traditional paper-based transactions. Online transactions are also more secure because there is no personal information to share with anyone else.
Many banks also offer electronic payments, such as: direct deposit and direct debits. A direct debit is simply where an electronic transfer is made directly into the account of the customer, whereas a direct deposit is when the customer deposits money into his bank account.
This electronic payment can be done through different ways such as: through online banking or through bank checks and other online financial transactions. Another common way to make a financial transaction is to send a letter, e.g. which can be used to send electronic checks, or through electronic mails.