Bank Endorsement

A bank endorsement is a guarantee by a bank that a negotiable instrument (for simplicity, a check) is good. This assures the other party in the deal that the payment is in good order.

For example, Tom buys a motorcycle via the internet. The two parties don't know each other. The seller wants to make sure the deal doesn't end up a regrettable experience, e.g. a bad check. Therefore, the seller requests a bank endorsement to guarantee he gets his money. For a fee, the bank endorses the payment (again, for simplicity, a check).