Hello,
That's an interesting question, I'll try to explain the basic idea behind these topics.
APP is among other tasks used to generate the payment orders, which are considered as payment medium (often in form of flat .txt file or in xml format), which contains instruction on the payment details that your house bank has to perform. Payment mediums especially across different countries can have different structures (i.e. different details of the payment might be required). The most popular structures (e.g. SWIFT MT100) can be supplied by SAP. In these cases you have to use the classic payment mediumprograms (RFFO*).
However, sometimes you need to generate some specific format of the payment order, which is not supplied by SAP. In this case, you can use Payment Medium Workbench (PWM), which can be considered as a workbench that enables you to configure and create custom payment media. PWM is used to define payment medium formats, note to payee etc.
Data Medium Exchange Engine (DMEE) is a tool that is used in PMW in order to create the fine output (i.e. the text file with payment orders). DMEE can be considered as an independent tool, because it is used not only for payment media generation, but also in other cases (profit tax returns, electronic VAT vouchers etc.).
Hope it will help you!
Best regards,
The Wirtschaftsmann