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| | What is Money Order? |
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A Money Order is a payment order for a pre-specified amount of money. It is a more trusted method of payment than a personal check, because it is required that the funds be prepaid for the amount shown on it. Merchants may welcome the extra security that being paid with a money order may offer. A money order is purchased for the amount desired. In this way it is similar to a certified check. The main difference is that money orders are usually limited in face value to some specified figure, while certified checks are not. Money orders typically consist of two portions: the negotiable check for remittance to the creditor, and a receipt the customer retains for his records. The amount is imprinted by machine or check writer on both portions.
Money orders were originally issued by the US Postal Service as an alternative to sending cash through the postal system for those who did not have checking accounts. They 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. |
In India, a Money Order is a service provided by the Indian Postal Service. 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 his 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.
An international money order 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 he or she resides 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 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. In particular, several countries are very strict that the money order be on pink paper and include the words
"postal money order". In particular, the 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.
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