Payment Definition

A payment is the transfer of funds in exchange for an asset, usually in accordance with agreed-upon terms. For example, if you obtain an automobile loan you will be contractually obligated to make a certain number of payments (i.e. 60 payments) on a scheduled period (i.e. one payment each month) of a specified amount. Most formal payments, such as those made on credit card accounts or mortgage loans, are satisfying a contractual agreement.