"something left as security," late 15c. (mid-12c. as Anglo-Latin pandum), from Old French pan, pant "pledge, security," also "booty, plunder," perhaps from Frankish or some other Germanic source (cf. Old High German pfant, German Pfand, Middle Dutch pant, Old Frisian pand "pledge"), from West Germanic *panda, of unknown origin.
The Old French word is identical to pan "cloth, piece of cloth," from Latin pannum (nominative pannus) "cloth, piece of cloth, garment" and Klein's sources feel this is the source of both the Old French and West Germanic words (perhaps on the notion of cloth used as a medium of exchange).