A payee is a party receiving payment in exchange for goods or services.
They can receive payment from the payer in various forms, such as cash, checks, or other transfer mediums.
In return for the payment, the payer receives the goods or services the payee provides.
It’s important to note that there can be multiple payees in a transaction, or in some cases, the payee and payer can be the same party.
To better understand this concept, in any transaction, two parties are involved:
the party providing the goods or services and the party receiving them.
To receive the goods or services, the payee requires value or an exchange of value from the payer, often in the form of money.
This can also involve cryptocurrencies.
In a banking context, the payee must have an active and valid account to which the payer can transfer the funds if the transaction is not conducted in cash.
Additionally, in promissory notes, the payee is the party to whom a predetermined sum is promised to be paid.
At the same time, the buyer or payer is the party making the payment.
It’s worth noting that there can be multiple payees, particularly in electronic transfers, where funds withdrawn from a payer’s account may be split into various allocations for different payees.