1540s, "make compensation for, spend, pay for" (a sense now archaic); 1570s, "satisfy by payment," from Old French defraier, defrayer (15c.), perhaps from de- "out" (see de-) + fraier "spend," from frais "costs, damages caused by breakage," from Latin fractum, neuter past participle of frangere "to break" (from PIE root *bhreg- "to break").
Alternative etymology traces second element to Old High German fridu "peace," via Vulgar Latin *fredum "fine, cost." Compare affray. For possible sense development, compare pay from pax "peace."