Who is responsible for payment of a money order or traveler's check?

Who is responsible for payment of a money order or traveler's check?

• A. The payee
• B. The issuer
• C. The purchaser
• D. The agent

Answer: (B)

The issuer is responsible for payment. Money orders and traveler's checks are prepaid instruments issued by a financial institution or money services business. When you buy one, you pay the issuer upfront, and when someone presents it for redemption, the issuer covers the payment to the holder. The purchaser’s role ends at the time of purchase, while the issuer bears the liability for payment. The agent simply sells the instrument on behalf of the issuer, not taking on payment responsibility.

The issuer is responsible for payment. Money orders and traveler's checks are prepaid instruments issued by a financial institution or money services business. When you buy one, you pay the issuer upfront, and when someone presents it for redemption, the issuer covers the payment to the holder. The purchaser’s role ends at the time of purchase, while the issuer bears the liability for payment. The agent simply sells the instrument on behalf of the issuer, not taking on payment responsibility.