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Answer Posted / aisha
Demand Draft and Pay Order, both are payment
instruments.The main difference between these two is that
demand draft is a written order directing the payment to be
made to a third party outside your city,while a pay order
is drawn for the third party within your city. There are
three parties involved:
Drawer: Issuing Bank or the bank providing the service.
Drawee: The bank on which the draft is drawn.In other
words,the bank who undertakes to make payment.
Payee: Recipient or the person to whom the payment is to be
made, also called beneficiary.
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