Who is referred to as the payor in check processing?

In check processing, the payor is the party obligated to pay on the check, which is usually the account holder who has written the check. This individual or entity has funds in their account that can be drawn upon to settle the payment made to the payee, who is the recipient of the check. The role of the payor is crucial in the check transaction as they must have sufficient funds available to ensure that the check is honored when presented for payment.

Understanding the role of the payor is essential in the context of check processing, as it highlights the responsibility the payor has in maintaining funds and complying with the terms set forth by their financial institution. The payor's obligations, such as sufficient balances and proper account management, are pivotal in the smooth operation of the check payment system.