Money Order

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DEFINITION of 'Money Order'

A certificate that allows the stated payee to receive cash on-demand, usually issued by governments and banking institutions. A money order functions much like a check, in that the person who purchased the money order may stop payment.

BREAKING DOWN 'Money Order'

Money orders are readily accepted and converted to cash, and are often used by people without access to a standard checking account. Money orders are an acceptable form of payment for small debts, both personal and business, and can be purchased for a small service fee from most institutions.

Money orders were first issued by American Express in 1882, and later became popularized as traveler's checks.

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