A money order is a financial instrument that is used to pay the person or organization named on the instrument a specific amount of money. A money order typically takes the place of a check payment, especially when the recipient wants to be assured of the transfer of funds. The person paying with a money order usually buys it from a financial institution by prepaying it, after which the institution guarantees payment of the full amount of funds stated on the instrument. The institution issuing the money order earns a profit by charging a small fee to the person using it to make a payment.
A money order can provide some security to the paying person, because the instrument does not contain any personal information about the payer; that is, there is no checking account routing number or account number on the document, as would be the case with a check.