Definition - What does Payee mean?
A payee is a person to whom money is paid or is supposed to be paid to.
In the context of the law, checks and bills of exchange commonly require the payee's name to be included.
Once the payee is paid with a check or a bill of exchange, he or she becomes the legal owner of the funds released by the check, bill of exchange, or other note.
Justipedia explains Payee
It is common for payees to be owed money through the terms of a promissory note. With a promissory note, one party (the payor) typically agrees to pay a certain amount of money to another party (the payee).
The payee usually holds the promissory note, proving such a debt until the payor pays it off. After the payor repays the debt, then no further money is owed to the payee, and the negotiation is over.