As with anything banking-related, fees, payment limits and methods for online money orders vary by company. For example, if you buy an online money order from Payko -- arguably the leading company offering money orders over the Internet -- you can pay using your PayPal account, which is either linked to your bank account or your credit or debit card. Although convenient, Payko's customers don't have the flexibility of physical transactions, as the service presently limits each account to a single $200 online money order per day. According to their Web site, this is the highest money order amount currently available online.
However, using Payko is going to cost a bit more than sending a traditional money order. The company's fees range from $3.49 to $4.99, plus up to 5.49 percent of the total amount being sent. Also, unlike standard Internet transactions, the exchange is not instantaneous. A physical money order is still printed, and it can also take several days for it to be sent out, depending on the type of service and delivery method you choose. For example, sending the money order via express mail is pricier, at $15, than standard first class mail, which is free but takes longer.
There are a few other Web sites offering online money orders, but most of them are based in India, and both you and the recipient must be in the country in order to use these services. Other companies advertise online money orders, but actually offer money transfers, which are not the same thing.
We must state, however, that the online money order business is a volatile industry. While researching information for this article, we came across several Web-based companies that apparently offered money orders but had recently shut down. Even the Payko Web site went down for several days between the time this article was written and its publication.
Before purchasing an online money order, do a bit of research to make sure the company is reliable, especially if they appear to be recently established. If you're at all unsure, you may want to head down to your local bank, post office or grocery store to buy one in person. It might not be as convenient, but it'll cost less, and you won't have to worry about the legitimacy of the transaction.