You might have found the term “payee” somewhere. Yet, especially when dealing with payments and payout processes, this term is very common. So, what is it? Let us clarify the payee meaning for you!


What is a Payee?

A payee is an entity that receives a payout. Basically, the payee is the one receiving funds from a payer. The payment made can be due to a product or service that was provided by the payee. So, for example, whenever an Asian merchant wants to pay a Mexican contractor (suppliers, partners, gig-workers, etc.), we say that this merchant is paying a payee. 


Identifying a Payee

One clear way to identify a payee is in banking transactions. These transactions specify who is the payer and who is the payee. Thus, in paper checks, for instance, the payee is the person or organization to whom the check is written. 

Considering online payments, the payer provides the payee information when setting up the transfer. It needs to have name and account infos, so the bank knows where to send the funds. This payee data is used by the bank to determine where to send the money. However, it is important to acknowledge that this transaction will only work if the payee has an active bank account and provides the payee with the most recent and valid information.


What is the Difference between Payout and Payee?

Both terms seem very similar and sometimes it can cause some confusion. However, they have very different meanings. 

You already know that payee is the entity that receives a payment. Yet, payout is the act of paying a payee. There are many ways to perform a payout, such as banking transfers. The same applies to payout solutions, which includes mass payouts and global payouts. 


EBANX Payout

EBANX Payout solution offers a localized payout experience, in which brands can easily navigate the local challenges of settling internal funds to contractors in different countries and currencies, safely and quickly, while leveraging the expertise surrounding the Latin American market that only EBANX offers.