A central function of non-cash payment instruments is to communicate information about an economic exchange between the time and place at which the exchange takes place to the institutions or people responsible for settling any claims created by the transaction. This communication can run in either direction. A guaranteed payment instrument like a bank draft or a money order conveys information that funds have been allotted for the desired purchase. In contrast, a personal check contains no such guarantee. It only enables the seller to communicate the buyer's obligation to the buyer's bank. The delay inherent in this communication presents the seller (or the seller's bank) with credit risk that would not exist with a guaranteed payment.
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