Countermand

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DEFINITION

Cancellation, revocation or reversal of an order that has been previously issued. Countermand, in the financial world, is specifically applicable to payments; it means a customer of a bank or financial institution revoking instructions to pay, or stopping payment to another party. Countermand of payment by the customer then ends the legal duty of the bank or institution to make the payment to the party, as originally specified by the customer.

INVESTOPEDIA EXPLAINS

In case of check payments, a customer can countermand the payment at any time before the check is presented, through a stop-payment order. Where electronic fund transfers are concerned, if the funds have not yet been transferred, a countermand order would cancel the original funds transfer order. If the funds have already been transferred, the financial institution would commence the process to reverse the funds transfer.


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