Who Is the Payor on a Check?

A check represents a written instruction to a bank, directing it to transfer a specific sum of money from one account to another. This article clarifies the different parties associated with a check, focusing on the role of the “payor” and distinguishing it from other related terms.

The Parties Involved in a Check

A check transaction involves three primary parties. The drawer, also known as the maker, is the individual or entity that writes and signs the check. This party owns the bank account from which funds are withdrawn and authorizes the payment.

The drawee is the bank or financial institution on which the check is drawn. This institution holds the drawer’s account and is instructed to pay funds when the check is presented. The drawee facilitates the transfer of money as directed by the drawer.

The payee is the person or entity to whom the check is made out and who is entitled to receive the money. For example, if a check is written for services, the service provider is the payee.

Identifying the Payor

The “payor” is the drawer—the person or entity who writes and signs the check. This party initiates the payment and is responsible for ensuring sufficient funds are available to cover the check’s amount. The payor’s signature validates the check.

Information identifying the payor is typically found on a standard check. The payor’s name and address are usually pre-printed in the top left corner. The signature line, in the bottom right, is where the payor authorizes payment.

When an individual writes a check to a utility company, they are the payor. They direct their bank to pay the company from their account, signifying responsibility for the payment.

Distinguishing Related Terms

While “payor” refers to the drawer of a check, the term “payer” is a general term for any party making a payment, regardless of the method. For instance, someone paying cash for groceries is a payer. However, “payor” is the accurate term for the party initiating the payment instruction.

The bank, as the drawee, disburses the money from the account. However, the bank is not the payor; it acts solely on the payor’s (drawer’s) instructions. The bank’s role is to facilitate the transfer, not to initiate the financial obligation.

The payor stands in direct contrast to the payee. The payor is the party sending the payment, while the payee is the party receiving it. This distinction is fundamental to understanding the flow of funds in any financial transaction, especially those involving checks.