What is a 'Stop Payment'

A stop payment is a request made to a financial institution to cancel a check or payment that has not been processed yet. A stop payment order is issued by the account holder, and can only be enacted if the check or payment has not already been processed by the recipient.

BREAKING DOWN 'Stop Payment'

Issuing a stop payment order often costs the bank account holder a fee, which is levied by the financial institution. There are several reasons that a stop payment order may be requested. For example, the account holder may have sent a check for the wrong amount, or may have canceled a purchase after having put the check in the mail.

RELATED TERMS
  1. Certified Check

    A type of check where the issuing bank guarantees the recipient ...
  2. Automatic Bill Payment

    A money transfer scheduled on a predetermined date to pay a recurring ...
  3. Rubber Check

    Another name for a "bounced check." A rubber check is a slang ...
  4. Canceled Check

    A check that has cleared the depositor's account and has been ...
  5. Exception Item

    A banking term used to describe a check that cannot be processed. ...
  6. Returned Payment Fee

    A charge a credit card company may assess to a customer’s account ...
Related Articles
  1. Insights

    Is the Payment Processing Industry Evolving? (PYPL, TGT)

    Learn about the many changes in commerce and payment systems that are happening in the rapidly evolving payment processing industry.
  2. Trading

    Protect Yourself From Market Loss

    There are several simple strategies you can use to protect yourself from downside risk.
  3. Investing

    When is a Down Payment Used?

    A down payment is an initial cash payment on an expensive good.
  4. Personal Finance

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  5. Investing

    When Using a Money Order Makes Sense

    Money orders are usually the least expensive way to send "cleared" funds to pay a bill (or traffic ticket). Here's how they work and what to watch out for.
  6. Trading

    A Logical Method Of Stop Placement

    If holding on to losing trades is human nature, this tool will help protect you from yourself.
  7. Trading

    Maximize Profits With Volatility Stops

    Find out which type of volatility stop fits your trading objectives.
  8. Small Business

    How Digital Payments Will Change Commerce in 2016

    The way we transfer and spend money is constantly evolving, and 2016 is poised to expand digital payments like we've never seen before.
RELATED FAQS
  1. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  2. What is the difference between a buy limit and a stop order?

    Learn the difference between buy limit orders and stop orders, including stop loss orders, and understand the risks of the ... Read Answer >>
  3. What does "gather in the stops" mean?

    "Gather in the stops" is a trading strategy used by investors to trigger stop orders already in place so that the price of ... Read Answer >>
  4. What is the difference between a stop order and a stop limit order?

    Learn the differences between a stop order and a stop limit order. Traders use these as stop losses and regular investors ... Read Answer >>
  5. Is a deficit in the balance of payments a bad thing?

    Discover how it might be possible to run a balance of payments deficit, what that means in terms of international trade and ... Read Answer >>
  6. When should I use a trailing stop order?

    Learn about trailing stop orders, how to use them and when they should be used through an extensive example. Read Answer >>
Trading Center