A payment instrument is a document that transfers money from one party to another, such as a check or a credit card. A payment instrument can be used anytime and anywhere, as long as the other party has access to the device.
Payment instruments are the means of payment in which the payer transfers money or other assets to a payee, who then returns something of equal value.
Payment instruments can be classified into four broad categories: cash, cheque, credit card, and debit card. Cash is any currency not issued by a bank or government agency. Cheques are written orders for payment drawn on a bank account payable to the order-drawee. Credit and debit cards are both electronic payment methods that use revolving credit agreements with banks to borrow money.