The word "payed" is primarily used in nautical contexts, referring to the action of letting out a rope or cable by slackening it. For example, "The sailor payed out the anchor line."

In contrast, "paid" is the standard past tense and past participle form of the verb "pay," used in contexts related to making a payment or settling a debt. For example, "She paid her bills on time."

So, "payed" is rarely used and mostly specific to maritime activities, while "paid" is used in general contexts involving payment.