A payment is the transfer of wealth from one party (such as a person or company) to another. A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation.

The simplest and oldest form of payment is barter, the exchange of one good or service for another. In the modern world, common means of payment by an individual include money, check, debit, credit, or bank transfer, and in trade such payments are frequently preceded by an invoice or result in a receipt. However, there are no arbitrary limits on the form a payment can take and thus in complex transactions between businesses, payments may take the form of stock or other more complicated arrangements.

In law, the payer is the party making a payment while the payee is the party receiving the payment.

Payment methods

There are two types of payment methods; exchanging and provisioning. Exchanging is to change coin, money and banknote in terms of the price. Provisioning is to transfer money from one account to another. In this method a third party must be involved. Credit card, debit card, money transfers, and recurring cash or ACH(Automated Clearing House) disbursements are all electronic payments methods. Electronic payments technologies are magnetic stripe card, smartcard, contactless card and mobile handset. Mobile handset based payments are called mobile payments.

Parties involved

Payments may be classified by the number of parties involved to consummate a transaction. For example, a credit card transaction in the United States requires a minimum of four parties (the purchaser, the seller, the issuing bank, and the acquiring bank). A cash payment requires a minimum of three parties (the seller, the purchaser, and the issuer of the currency). A barter payment requires a minimum of two parties (the purchaser and the seller).

Payment providers

The infrastructure and electronic clearing methods are formed by the payment provider. Global credit card payment providers are Visa and Mastercard. Japan Credit Bureau (JCB) is a payment provider for Japanese market. Maestro and Cirrus are international debit card payment providers.

Global payments market

In 2005, an estimated $40 trillion globally passed through some type of payment system. Roughly $12 trillion of that was transacted through various credit cards, mostly the 21,000 member banks of VISA and MasterCard. Processing payments, including the extending of credit, produced close to $500 billion in revenue.

Debit cards

In the U.S., debit cards are the fastest growing payment technology. In 2001, debit cards accounted for 9 percent of all purchase transactions, and this is expected to double to 18.82 percent in 2011

Checks

Historically, checks have been one of the primary means of payment for purchasing goods and services in the U.S. In 2001, checks accounted for 25 percent of the U.S.-based payment mix; in 2006, this is projected at 17 percent.