A draft, more specifically known as a bank draft, is one method of paying for a purchase in the absence of cash or credit cards.
Referred to as cashier’s checks in the United States, bank drafts are more commonly used in the United Kingdom. In order to secure a bank draft, one has to withdraw funds from one’s account for its purchase. This means that a certain amount has been deducted from the total fund in the account, so the seller knows that the payment is guaranteed. It therefore works differently from regular checks, which do not provide the seller with the assurance that there are enough funds to cover the amount stated in the check. As such, a bank draft is generally considered a more reliable form of payment by merchants. At the same time, it provides the buyer with a record of the transaction, which is beneficial for record-keeping.
At present, however, there are various payment methods which make the use of bank drafts less necessary and frequent. For instance, it is now possible to pay using a debit card. Since using a debit card means that the amount due is automatically deducted from one’s account as the transaction is completed, then merchants enjoy the security of this payment option. At the same time, a buyer is given the convenience of paying without having to carry cash or purchase a bank draft and the savings of not having to pay credit card charges. The use of a bank draft may only be necessary in cases where the seller is an individual who does not have the necessary equipment to process debit or credit card transactions.