Postal order

5 shilling postal order stolen from Terrence Back

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New Zealand 1952 20 Shillings Postal Note

1943 Australia Defence Canteen order

Postal Order

A postal order is a financial instrument, usually intended for sending money through the mail. It is purchased at a post office and is payable at another post office to the person named as the payee. It is a more secure method of sending money than sending cash in an envelope, reducing the risk of theft. Postal orders are popular for settling small debts, making charitable donations, and sending monetary gifts.

History

The concept of the postal order originated in the United Kingdom in 1881 as an alternative to postal money orders, which required the sender to know the recipient's bank account details. Postal orders were introduced as a more convenient method, allowing money to be sent without such knowledge, thereby simplifying transactions. Over time, the use of postal orders spread to other countries, including the Commonwealth nations and former British colonies.

Features

Postal orders are available in various denominations, allowing senders to choose the amount they wish to send. They typically have a specified expiry date, after which they can no longer be cashed, although some postal administrations may allow for the postal order to be reissued or refunded if it is not used within a certain period.

To enhance security, the sender can specify the recipient's name on the postal order, making it difficult for anyone other than the intended recipient to cash it. However, it is also possible to purchase postal orders without a specified payee, making them negotiable by whoever holds them.

Usage

Postal orders are used for a variety of purposes, including:

• Payment for goods and services when the buyer and seller are in different locations.
• Sending monetary gifts to friends and family, especially on occasions such as birthdays and weddings.
• Donations to charities and other organizations.
• Payment of small debts or bills where other forms of payment are not feasible or preferred.

Advantages and Disadvantages

Advantages

• **Security:** Less risk of theft compared to sending cash through the mail.
• **Anonymity:** The sender does not need to reveal their bank details to the recipient.
• **Accessibility:** Available to those without access to bank accounts or electronic payment methods.

Disadvantages

• **Cost:** Purchasing a postal order may involve a fee, which varies depending on the value of the postal order and the postal administration.
• **Convenience:** Not as immediate as electronic transfers, requiring a visit to a post office for both purchasing and cashing.
• **Limitations:** There may be a maximum limit to the value of a single postal order, necessitating the purchase of multiple orders for larger amounts.

Modern Relevance

With the advent of electronic payment systems, the use of postal orders has declined. However, they remain a relevant payment method for individuals without access to banking services or those who prefer not to use electronic payments for security or privacy reasons. Postal administrations in some countries have modernized the postal order system, integrating electronic features to enhance convenience and security.

See Also

• Money order
• Bank draft
• Cheque