Different Modes or Types of Payment
The Mode of Payment means the payment can be done in several ways such as by giving Money, Bank Draft, doing Telegraphic Transmission or Mail Allocation, Promissory Note, Cheque, by the help of Money Order or else Postal Order, Bill of Exchange, etc.
This is explained as one of the traditional modes of a sum. In this situation, the purchaser pays cash which appears like notes besides coins to the vendor. The seller while receiving cash issues cash message or in the form of cash receipt. This type of Mode of Payment is appropriate only for minor dealings.
Telegraphic Transfer/ Mail Transfer
In this method, the payer credits the cash with other types of fees in a bank owning a branch workplace at the payee’s site. On getting the money and other dues, the bank briefly reports the branch workplace to credit the sum to the payee’s account. The payee is therefore informed besides can take out the cash. The cash can also be forwarded through mail transfers, which takes a longer time. This Mode of Payment helps for quick remittance, but it is not a popular one.
Money Order or Postal Order
Payment can also be sent by means of money orders besides postal orders. Businessmen may prefer postal orders since a great number of postal orders could be collected besides encashed at a moment. Postal order is considered to be safer means as compared to a money order. Postal orders can be crossed for security purpose. However, dealers usually do not utilize this Mode of Payment.
Bill of Exchanges
As per the Section 5 as regard to Indian Negotiable Instruments Act, 1881, “A Bill of Exchange is a Mode of Payment in writing including an unrestricted order, signed by the creator, leading a certain individual to pay a specific sum of money merely to, or else to the order offered by a certain individual to the holder of the appliance.”
Some Advantages of Bill of Exchange includes:-
The owner of the bill could obtain the cash even earlier the payable date of the bill, via disregarding the bill with the possessor’s bank.The bill can be shifted to another person.It allows the procurer to purchase the things without making real disbursement. He receives the bill & pays at a later period.
This sort of note is a tool in the text (it is not a bank note or else e currency note) having an unrestricted task signed through the maker. It is a Mode of Payment to recompense a definite sum of cash merely to, or else to the order of a specific being, or to the holder of the instrument.
Each entrepreneur owns a bank account in order to enable his business transactions. While the bank account is opened, the bank provides a cheque volume for making expenses. Cheque payment is regarded as a suitable and benign Mode of Payment. To guarantee safety, the cheque might be crossed usually or particularly, so that the payment to a wrong person is prevented.
A Bank Draft is well-defined as “It is a kind of order to pay cash, drawn through one workplace of a bank upon a new place of work of the similar bank for an amount billed to order on request.” The Bank draft is a Mode of Payment regularly employed for the purpose of relocating capitals from one place to other sites within a nation or from one nation to another.A bank draft is regarded as an order provided via one bank upon another of its subdivision bank located any other place to pay a definite sum of cash.The fillings of bank draft are in a cheque form; however, it is signed not via the payer however through the banker.