payor bank

Payment must be received from the payor bank before the item may be credited to the depositor's account.

Cheques (or "checks" as they are known in the United States) are usually handled by banks as a cash item, on the assumption that the payor bank will honor the check.

Simultaneously, the payor bank notifies the payee bank’s Canadian correspondent of the settlement instructions through SWIFT and it, in turn, notifies the payee’s bank in New York.

In ACSS and related debit-pull systems, risk controls include: physical verification of the cheque-writer’s signature at the payor bank (to authorize the payment transfer); personal and corporate identification numbers for direct credit transfers; and, ultimately, ‘reversal’ of unacceptable payment items.