CHEQUE

A cheque (or check in American English) is a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The person writing the cheque, the drawer, has a transaction banking account (often called a current, cheque, chequing or checking account) where their money is held. 

The four main items on a cheque are

• Drawer, the person or entity who makes the cheque
• Payee, the recipient of the money
• Drawee, the bank or other financial institution where the cheque can be presented for payment
• Amount, the currency amount

Parts of a cheque based on a UK example

1. drawee, the financial institution where the cheque can be presented for payment
2. payee
3. date of issue
4. amount of currency
5. drawer, the person or entity making the cheque
6. signature of drawer
7. Machine readable routing and account information

Cheques sometimes include additional documents. A page in a chequebook may consist of both the cheque itself and a stub or counterfoil – when the cheque is written, only the cheque itself is detached, and the stub is retained in the chequebook as a record of the cheque. Alternatively, cheques may be recorded in a separate ledger, such as at the back of a chequebook.

In cheque payment is made after presenting cheque to bank, while in DD is given after making payment to bank.  Cheque can bounce due to insufficient balance . DD cannot be dishonored as amount is paid before hand.  Payment of cheque can be stopped by drawee, whereas payment cannot be stopped in DD.  A cheque can be paid to bearer or order. While, DD is paid to person on order.

Alternatives to cheques

1. Debit card payments
2. Credit card payments
3. Direct debit (initiated by payee)
4. Direct credit (initiated by payer), ACH in US, giro in Europe, Direct Entry in Australia
5. Wire transfer (local and international)
6. Electronic bill payments using Internet banking

       7.Online payment services (for example PayPal and WorldPay)