What is a money order?

Samuel Clennett
4 minute read

If you want to pay a bill or buy something online or at a private sale, you can use a money order. This payment method can also be used to send money to friends and family in Australia, or even across the world.

But what is a money order exactly, and how do you set one up? Crucially, how much do money orders cost? This guide gives you the lowdown on both domestic and international money orders, as well as alternative payment methods which could potentially save you money.

For example, get a Wise multi-currency account and you can send and receive money internationally with low fees and the real exchange rate.

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What is a money order?¹

In a nutshell, a money order is an instruction for a bank-to-bank transfer for a specific amount of money. Think of it like a certified cheque, but more trusted and secure as it’s pre-paid (so it can’t bounce). You may also see money orders referred to as money transfers.

Unlike other kinds of transactions, money orders are issued by Australia Post rather than banks or other financial institutions.

You can make both domestic and international money orders, sending cash within Australia or all over the world.

Domestic money order

If you’d like to pay for something or send money to someone within Australia, you can use a domestic money order. There are a few options to choose from, such as standard, express and bulk money orders².

  • Standard Money Order – for amounts up to $5,000 AUD. Head into your local participating Post Office to pick up and pay for your money order, then you can give or post it to your recipient right away.

  • Express Money Order – for amounts up to $10,000 AUD, transferred to any participating Post Office in Australia within the hour. You’ll still need to visit a Post Office branch in person to arrange the money order, but Australia Post will take care of delivery.

  • Bulk Money Orders – a suitable option for business wanting to send multiple refunds or other payments to customers or suppliers. The maximum value of each payment must be under $1,000 and bulk money orders are best arranged by phone or email.

To send a money order, you’ll need to show valid photo identification³ in the form of a passport, driving licence, government-issued ID or credit card. Then, all you need to do is provide the name of the recipient and the amount to be sent. The money order and receipt will be printed out while you wait.

The lucky recipient of your money order will have a few options for collecting their cash⁴. They can cash in the money order over the counter at their local Post Office, or deposit it in their bank account – either at their own bank or a Post Office offering the Bank@Post deposit service. The payee will also need to show some ID to cash in or deposit their money.

International money order⁵

Want to send money to someone in another country? Australia Post also offers an international money transfer service, provided by Western Union.

You can still do it all from your local Post Office branch though, simply head to the counter with a valid photo ID and your Australian mobile number. Provide the details of the transfer (i.e. the recipient, amount and destination) and you’ll be given a quote which includes upfront fees and exchange rate details.

You can also choose how the recipient will collect their money. These include⁶:

  • Cash pickup at a Western Union agent – available within minutes

  • Direct bank transfer – available within 1 hour to 2 business days depending on where the money is being sent from and to

  • Mobile wallet – available within 1 hour to 2 business days.

Alternatively, you can arrange international money transfers online through Western Union.

While this is the most convenient option for many people, remember that it isn’t the only service offering online international money transfers. It’s always worth comparing costs across providers, and keeping a lookout for hidden fees and poor exchange rates.

Western Union usually adds a mark-up on top of its exchange rates, which can make your transfer more expensive. Alternatively, send money worldwide with Wise and you’ll always get the real mid-market exchange rate along with tiny transfer fees. This could save you a bundle.

Money order fees

Now it’s time to look at the important stuff – how much your money order will cost. Here’s your at-a-glance guide to the costs when you use Australia Post to send money. However, you’ll need to get individual quotes for some services such as bulk and international money orders.

Type of money orderFee⁷
Standard$11 AUD
Express$25 AUD
International (via Western Union)POA (including upfront fees and exchange rate)

Remember that when it comes to sending money internationally, you have plenty of alternative options.

Send money with Wise and you’re guaranteed the real exchange rate, which means no expensive mark-up. Fees are clear, upfront and always fair, and some transfers complete in a matter of hours.

It’s super easy to arrange a payment with Wise. You can do it in minutes, without the need to visit a physical branch in person. You could even find that your transfer ends up being up to 8x cheaper⁸ compared to using your bank.

Now that money transfer has gone digital, money orders aren’t as widely used as they once were. However, if you need a secure and quick alternative to sending a cheque (and there’s a handy Post Office in your neighbourhood) it could still be a good choice, especially for domestic transfers.

Sources used:

  1. Yahoo Finance - Money Orders
  2. Auspost - Domestic Money Transfers
  3. Auspost - Domestic Money Transfers
  4. Auspost - Domestic Money Transfers
  5. Auspost - Western Union
  6. Auspost - Western Union
  7. Auspost - Domestic Money Transfers
  8. Wise Australia

Sources checked on 23-September 2020.

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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