All about Payment
Payment is defined as “the partial or complete discharge of
an obligation by its settlement in the form of the transfer
of funds, assets, or services equal to the monetary value
of part or all of the debtor’s obligation”. Payment is an
act of giving a sum of money after getting the work done.
In other words money is given for carrying out what has
been promised. You get a salary as a payment for your work
for a period of a month, a day or fortnight. Whenever you
purchase something or dine out in restaurants, don’t you
pay the retailer or the restaurateur finally to end the
deal. This called payment as you pay for the services
availed. From barter system in early period to this modern
age payment has been the basis of any transaction or
business dealing. Nowdays, money is widely being used for
making payments and accounting for debts and credits.
Payment is simply the fulfillment of a promise. Although
this is the normal understanding of the word, payment
also means all the ways in which a creditor is satisfied
and the debtor is made free. An example would be, suppose
a person owes you money and you have kept a valuable item
of his as colateral. With the passing of time you want to
own a piece of land as a payment. When that is finished
the first obligation of that person is finished.
It’s not always that the payment is done in one go.
Sometimes the amount is paid in parts or installments. Like
the payments done to the lender periodically in order to
repay the loan. It covers interest repayment, premiums and
principal amount. In other loans, like short-term and fixed
rate loans initially a small payment is done for a fixed
period of time and then the remaining amount is paid at a
Payments are made in cash, through checks, debit cards and
credit cards. In today’s modern world many people use the
Internet to carry out their monetary transactions online.
This has given a charge to the e-commerce industry. Credit
cards have aided a lot in purchases made online. People
were already used to using credit cards. Now they are able
to buy and sell from the home itself, more and more people
prefer e-commerce transactions. Credit cards are a good
mode of payment but the problems of credit card fraud is
still a problem not solved.
Other methods of payment that are more secure and cost less
have also been invented such as paypal. To avoid any
complications or legal troubles one should always make their
payments on time and never buy somthing they cannot pay for.