Money order or a Postal order being a secure form of payment works like a prepaid check. It is a popular substitute for cash payments among those without/who do not have bank account and those who just want a more secure way to send money. The focus of this blog post is the world of Postal orders in which their functionality will be explained.
What is a Money Order?
- In simple terms, a money order is a piece of paper on which a certain sum of money is written and can be received by the person whose name is specified on it.
- It is prepaid in that the person buying the Postal order pays the full amount so there are no debts involved.
How it Works?
Money orders are commonly used when a personal check is not acceptable in a transaction or when a more secure form of payment is needed. Buying a Postal order requires you to write the name of the payee and the amount to be paid on the face of it. After that, Postal order will be sent directly or handed over to the payee who can cash or deposit it into his bank account.
Advantages and Disadvantages
Advantages
- Secure form of payment
- Accepted by a wide range of institutions
- Easy to track
Disadvantages
- Costly compared to other payment methods
- Limited in terms of maximum amounts
- Not as widely accepted as cash or credit cards
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Advantages in Detail
Money orders are one of the most reliable ways to make payments as they obligate the receiver to sign which is a security measure. They are trusted by most merchants, landlords, and government offices. Postal order also include a tracking feature so that you can know when the receiver has cashed it in, thus giving peace of mind for both sides.
Disadvantages in Detail
Although security is provided by Postal order, they are not free commodities. Costs of purchasing money orders can accumulate significantly particularly for bigger amounts. Moreover, there is usually a maximum limit on how much you can send with a Postal order, which may be restrictive for some transactions. Not all places people do business with accept them so it might be difficult to find a place to cash them.
Money Orders vs. Cashier’s Checks
Money orders and cashier’s checks are both secure options when it comes to payment, however there are few important distinctions. Postal order, on the one hand, are prepaid while cashier’s checks are drawn from the bank’s funds. Cashier’s checks typically come into play in larger transactions like buying a car or a house while money orders serve as alternative for smaller payments.
Alternatives to Money Orders
Should you be seeking other ways to send money, then the alternative could be using digital payment services like PayPal, Venmo, Apple Pay and Cash App. These platforms gives you a faster and more convenient way of transferring funds without having to use physical paper documents.
Additional Insight
Money orders are one of the dependable methods of payment where cash or checks cannot do. Eventhough they have fees and some limitations, Postal order provide a safe and traceable way to give money to people or companies/organizations.
Bear in mind, by all means keep you receipts when using Postal orders just as an evidence of payment in the event that any issues occur during the transaction process. Also be on the look out for fake money order scam since they are very hard to recover once lost.
If you ever decide to send money securely again, consider a money order next time for your peace of mind and security.
With postal orders being clear to you inside and out you will be able to opt in favor of the most effective way to deal with your monetary transactions. Stay safe and secure with your money management system!