Because cheques are subject to fraudulent presentation and the ultimate settlement of the
value of a cheque is deferred, their acceptance by the payee as a payment instrument typically depends on proof of identity or creditworthiness by the payor. The larger the value of the cheque
and the less frequent the occurrence of transactions between specific parties, the less acceptable is
a cheque as a payment vehicle without some form of guarantee or certification. Therefore, financial
institutions with well-recognized creditworthiness offer certification services for cheques,
segregating funds from the payor’s deposit account to cover the value of the cheque. Other common
payment instruments similar to certified cheques are drafts, travellers’ cheques, and money
orders issued by a broad range of financial institutions. These are similar to certified cheques in
the sense that the issuing institution provides assurance regarding the value of the transfer to
improve the acceptability of the non-cash payment instrument.