Editing Money order

{{short description|Payment order for a prepaid amount of money}}
[[File:PostanwBaunschw1867.jpg|thumb|Postal money order, Duchy of Brunswick, 1867]]
[[File:Specimen money order of Italy c. 1879.jpg|thumbnail|right|A specimen money order of Italy c. 1879]]

A '''money order''' is a directive to pay a pre-specified amount of [[money]] from prepaid funds, making it a more trusted method of payment than a [[cheque]].

==History==
Systems similar to modern money orders can be traced back centuries. Paper documents known as "[[flying cash]]" were used in China from the 800s, while the [[Hawala]] practice of informal financial remittances through a widespread system of brokers can be traced to India in the 1300s and remains common in parts of Asia and Africa.

The modern western money order system was established by a private firm in Great Britain in 1762, though due to high costs was not very successful. Around 1836 it was sold to another private firm which lowered the fees, significantly increasing the popularity and usage of the system. The [[Post Office (United Kingdom)|Post Office]] noted the success and profitability, and it took over the system in 1838. Fees were further reduced and usage increased further, making the money order system reasonably profitable. The only draw-back was the need to send an advance to the paying post office before payment could be tendered to the recipient of the order. This drawback was likely the primary incentive for establishment of the Postal Order System on 1 January 1881.<ref>{{cite web|url=http://www.victorianweb.org/history/letters/bootle.html|title=Post Office Money Order: A. Scott of Bootle to Peter Hodgson Esq, Whitehaven, 1841|website=www.victorianweb.org}}</ref>

==Usage==
A money order is purchased for the amount desired. In this way it is similar to a [[cashier's check]]. The main difference is that money orders are usually limited in maximum face value to some specified figure For example, {{As of|2025|April|lc=on}} the [[United States Postal Service]] limits domestic postal money orders to US$1,000 while cashier's checks do not have a set limit.<ref name=":0">{{cite web |title=Money Orders - USPS |url=http://www.usps.com/shop/money-orders.htm |website=www.usps.com}}</ref>  Money orders typically consist of two portions: the negotiable check for remittance to the [[payee]]  (the receiver), and a receipt or stub that the customer retains for record. The amount is printed by machine or [[checkwriter]] on both portions, and similar documentation, either as a third hard copy or in electronic form and retained at the issuer and agent locations.

==Drawbacks==
Money orders have limited acceptance in the insurance and brokerage industry because of concerns over money laundering. Because of provisions within the [[USA PATRIOT Act]] and the [[Bank Secrecy Act]], money orders have far more regulatory processing requirements than [[personal cheque]]s, [[cashier's cheque]]s, or [[certified cheque]]s.<ref>{{cite news
   |newspaper=[[New York Times]] |url=https://www.nytimes.com/1989/05/13/nyregion/16-are-charged-in-scheme-to-launder-drug-millions.html
   |title=16 are charged in scheme to launder drug millions |date=May 13, 1998}}</ref>

==National==

===India===
In India, a money order is a service provided by the [[India Post|Indian Postal Service]].<ref>{{citation |url=http://pib.nic.in/newsite/PrintRelease.aspx?relid=103665
  |title=RTI Process gets Further Boost with the Introduction of 'e-Indian Postal Order' for all by the Department of Posts
  |date=February 13, 2014 |access-date=February 16, 2014}}</ref> A payer who wants to send money to a payee pays the amount and a small commission at a post office and receives a receipt for the same. The amount is then delivered as cash to the payee after a few days by a postal employee, at the address specified by the payer. A receipt from the payee is collected and delivered back to the payer at their address. This is more reliable and safer than sending cash in the mail.

It is commonly used for transferring funds to a payee who is in a remote, rural area, where banks may not be conveniently accessible or where many people may not use a bank account at all. Money orders are the most economical way of sending money in India for small amounts.

===United States===
[[File:Money-Order.jpg|thumbnail|right|An international money order issued in Chicago for encashment in Germany]]
In the United States, money orders are generally easy to obtain, and are sold at [[United States Postal Service|post offices]], [[grocery store]]s, and [[convenience store]]s. Some financial service companies such as [[bank]]s and [[credit union]]s may not charge for money orders to their clients. Money orders are trusted financial instrument and are considered to be [[certified funds]] by the [[Internal Revenue Service|IRS]] and other Federal Agencies.<ref>{{CodeFedReg|26|403|29||subpart=C}}</ref><ref>{{CodeFedReg|29|500|144|subpart=E}}</ref> However, just because a particular business can issue a money order does not necessarily mean that they will cash them. The [[United States Postal Service]] (USPS) issues money orders for a small charge at any location, however they are only negotiable within the US and [[Territories of the United States|its possessions]]; after September 2024 the USPS stopped issuing international postal money orders.<ref>{{cite web |url=http://pe.usps.com/text/imm/immc3_018.htm |title=370 International Money Transfer Services - Postal Explorer |website=pe.usps.com}}</ref><ref>{{Federal Register|89|57174}}</ref>

The USPS began selling money orders as an alternative to sending currency through the postal system in order to reduce post office robberies, an idea instituted by [[Montgomery Blair]] who was [[Postmaster-General]] 1861–1864.<ref name= prominent>{{cite news |title= Montgomery Blair: A Prominent Figure in Political History Passes Away |newspaper= The Washington Post |date= July 28, 1883 |page= 1 |id= {{ProQuest|137873011}} }}</ref> Money orders were later offered by many more vendors than just the postal service as a means to pay bills and send money internationally where there were not reliable banking or postal systems. Companies that now offer money orders include [[7-11]], [[QuikTrip]], [[Cumberland Farms]], [[Safeway Inc.|Safeway]], [[Western Union]],<ref name="MonOrNYT79" /> [[MoneyGram]], [[CVS Pharmacy|CVS]], and [[Wal-Mart]].

==International==
An international money order<ref>[[The New York Times]] has articles dated 1902, 2002,  regarding the history of international money orders.{{cite news |newspaper=[[New York Times]] |url=https://www.nytimes.com/1902/03/28/archives/international-money-order-extension.html |title=International Money Order Extension |date=March 28, 1902}}</ref> is very similar in many aspects to a regular money order except that it can be used to make payments abroad. With it, a buyer can easily pay a seller for goods or services if they reside in another country. International money orders are often issued by a buyer's bank and bought in the currency that the seller accepts. International money orders are thought to be safer than sending currency through the post because there are various forms of identification required to cash an international money order, often including a [[signature]] and a form of [[identity document|photo identification]].

When purchasing an international money order, it is important to ensure that the specific type of money order is acceptable in the destination country.  Several countries are very strict that the money order be on pink and yellow paper and bear the words "international postal money order". In particular, [[Japan Post]] (one of the largest banking institutions in the world) requires these features. Most other countries have taken this as a standard when there is any doubt of a document's authenticity.

Foreign workers often use this method for reliably sending money "home".<ref>{{cite news |newspaper=[[The New York Times]] |url=https://www.nytimes.com/1996/09/14/business/mexicans-send-dollars-home-and-us-companies-profit.html |title=Mexicans Send Dollars Home and U.S. Companies Profit |date=September 14, 1996}}</ref>

==Alternatives==
In the last decade, a number of electronic alternatives to money orders have emerged and have, in some cases, supplanted money orders as the preferred cash transmission method.<ref name="MonOrNYT79">{{cite news |author=Brendan Jones |date=January 3, 1979 |title=Western Union and Visa Offer Money by Phone |url=https://www.nytimes.com/1979/01/03/archives/western-union-and-visa-offer-money-by-phone-moneyorder-volume-grows.html |newspaper=[[The New York Times]] |access-date=August 16, 2022}}</ref> Many of these alternatives use the ubiquitous [[Visa Inc.|Visa]]/[[MasterCard]] payment systems to settle transactions.  In Japan, the [[konbini]] system enables cash to cash transfers and is available at many of the thousands of convenience stores located in the country.  In Italy, the [[PostePay]] system is offered through the Italian post office.  In Ireland, [[3V (payment system)|3V]] is offered through mobile top-up locations. In the United States, [[PaidByCash]] is offered at 60,000 grocery and convenience stores. In Bangladesh, mobile banking services<ref>{{cite web|title=bKash|url=http://www.bkash.com/}}</ref><ref>{{cite web|title=DBBL Mobile Banking|url=http://www.dutchbanglabank.com/electronic_banking/mobile_banking.html|access-date=2012-11-02|archive-url=https://web.archive.org/web/20121029113611/http://www.dutchbanglabank.com/electronic_banking/mobile_banking.html|archive-date=2012-10-29|url-status=dead}}</ref> enable electronic transfer of money as well as retail transactions.
In the United Kingdom, a number of credit card providers have started to provide pre-paid credit cards. These cards can be "topped-up" at any location that uses the Pay-Point system and also at the Post Office for the Post Office card. PayPal has their own branded pre-paid card which can be "topped-up" using a PayPal account or Pay-Points.

== See also ==
* [[Electronic funds transfer]] – money transfer (other systems of transferring money)
* [[Postal order]]s – similar instruments mainly in [[Commonwealth of Nations|British Commonwealth]] countries
* [[United States postal notes]] – a payment system developed out of fractional currency

==References==
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{{DEFAULTSORT:Money Order}}
[[Category:Payment systems]]

[[es:Giro postal]]
[[ru:Платёжное поручение]]
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