Posted on Wednesday 04 December 2019
We all send out payments every day. Whether it’s getting your morning latte, buying a new pair of winter boots, helping a friend in a financial crisis, or paying electric and internet bills, you’re making payments. And not surprisingly, there are different ways to send your money into the right hands.
Next to good old-fashioned cash and cheques, one of the more traditional ways of sending payments is through a money order. If you haven’t used one before, you might be surprised to learn that they’ve been around for over a century. They were first introduced in 1882 by American Express, later known as traveller’s checks.
Despite their history, money orders aren’t used very often, but there are many good reasons why you may want to send one instead of cash or cheques.
We’ll dive into all of the basics to guide you through understanding money orders below.
A money order is a piece of paper that guarantees a specified amount of funds. The steps to putting it together are pretty straightforward; you fill out the name and address of the person who will be receiving the funds, specify the fund amount, sign it, and send it off. That's it. It's not like credit card arbitrage or something complex.
Money orders may sound similar to cheques, but they differ. Here are a few key differences between the two:
One of the biggest differences between the two methods is that a cheque could potentially bounce as a result of insufficient funds. Because a money order cannot be issued without cash prepayment, they are often a much more reliable way for the receiver to get funds.
Sometimes the only form of payment accepted is a money order, and in that case, you don’t have a choice. But even for the instances where you can choose between alternative payment forms, there are benefits like information safety to consider:
Whether you are an individual or a Canadian family seeking to stay financially secure, protecting your identity is very important.
Using a cheque connected to your bank account means that the receiver sees your account information, bank account number, and transit number. This isn’t a big deal when dealing with friends, family members, and trusted vendors. However, if you’re sending payment to someone you haven’t dealt with before, or if you just want an added layer of security, a money order may be a great choice.
Snail mail is great for thank you notes and that annual $10 from your grandmother, but you may think twice before you send large amounts of money through the mail. What happens if it gets delivered to the wrong address by mistake? How do you know that the person who ends up with your money is actually the right one?
Sending a few hundred dollars via money order instead of a cheque or cash could be a lot less conspicuous, cutting down on worries about theft. They also come with tracking numbers on the receipt, so you will know once it has been fulfilled. In addition, the recipient is going to have to sign and show proof of identification before cashing it out, assuring you that your money is going to the right place.
Since money orders are prepaid with cash, you don’t need a bank account to guarantee fund delivery. And the recipient can cash their money at a variety of different places without ever setting foot in a bank.
Getting a money order is easier than you think. In fact, it’s so easy that you can walk right around the corner and get one today. There are tons of places you can go, including:
Even retailers like Walmart offer such services. This is good if you want to get groceries, household items, and anything else you can think of. No matter where you decide to get one, shop around to ensure you get the lowest fees. In a world of late charges, overdraft fees, and penalties, every penny counts, more so when it comes to paying bills and settling debts.
If you want an alternative form of payment or need a quick cash infusion, My Canada Payday is here to help. We also offer direct lending services. Give us a call at any time (604-630-4783) or shoot us an email (email@example.com) to get in touch with our industry-leading customer support team!