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The short answer
Funding a transfer to Nigeria with a money order is now taxed: since 1 January 2026, the IRS applies a 1% remittance tax when the sender gives the provider cash, a money order, a cashier's check or a similar instrument. Many app-based providers do not take money orders at all, listing cards and bank accounts instead. Mailing a money order to Nigeria for the recipient to cash is a separate route with its own uncertainties.
Money orders are a familiar way to pay without a bank account, and some senders still use them for remittances. Two things have changed the picture: most transfers are now funded digitally, and since January 2026 a federal tax falls on remittances funded with money orders.
Can you pay for a transfer with a money order?
It depends on the provider and the channel. App-based providers generally list electronic payment methods. Remitly's Nigeria page, checked in October 2026, lists Visa and Mastercard debit and credit cards, Discover cards, prepaid cards and bank accounts for US senders; money orders are not on that list. Some agent counters accept money orders or cashier's checks, but practice varies by provider and location, so ask before you go.
The 1% remittance tax on money orders
The IRS announced in April 2026 that, beginning 1 January 2026, a 1% remittance transfer tax applies where the sender provides cash, a money order, a cashier's check or other similar physical instrument to the provider. The IRS's procedural update of 21 April 2026 lists traveler's checks too. The provider collects the tax from the sender, deposits it semimonthly and reports it quarterly on Form 720. The law exempts money withdrawn from an account at a financial institution and transfers funded with a US-issued debit or credit card, and the proposed regulations published in April 2026 treat the taxable list as cash, money orders, cashier's checks and traveler's checks.
So a money order now costs you twice: the issuer's purchase fee and the 1% tax at the remittance provider. Our explainer on who pays the 1% tax goes further, and whether it applies to US citizens covers a common question.
ID rules when you buy money orders
FinCEN's guide for money services businesses requires sellers to verify and record the buyer's identity for money order sales paid in cash of $3,000 to $10,000 inclusive, including the amount, date and serial numbers, kept for five years. Several cash purchases totalling $3,000 or more on the same business day are treated as one. Cash over $10,000 in a day triggers a Currency Transaction Report. Buying several money orders just under these amounts to avoid ID is structuring, which FinCEN describes as a federal crime.
Mailing a money order to Nigeria
Some people post a money order to family to cash in Nigeria. We could not confirm, from an official page, which Nigerian banks currently accept US money orders, how long clearing takes or what they charge, so treat this route as uncertain. Problems that commonly come up include loss in the post, long clearing times and the recipient's bank declining the instrument. Our page on mailing a US check to Nigeria covers the similar question for checks.
Comparing your options
| Funding method | 1% federal tax? | Other costs to check |
|---|---|---|
| Money order at a counter | Yes (IRS list) | Money order purchase fee; provider fee; FX margin |
| Cash at a counter | Yes (IRS list) | Provider fee; FX margin |
| Bank account (ACH) | No (exempt) | Provider fee; FX margin; may be slower |
| Debit card | No, if US-issued (exempt) | Provider fee; FX margin |
| Credit card | No, if US-issued (exempt) | Possible cash advance fee and interest from your issuer |
Whatever you choose, the CFPB's remittance rule means the provider must show its fees, any taxes, the exchange rate and the amount to be delivered before you pay, and you can cancel within 30 minutes unless the money has been collected.
Keep the stubs
If you do use a money order, keep the purchase stub with its serial number and the remittance receipt together. The stub is what the issuer needs to trace or replace a lost instrument, and the remittance receipt shows the tax collected, which helps if a provider's disclosure and your bank or card statement do not agree. Photograph both on the day; thermal paper receipts fade within months.
If you do not have a bank account
Money orders are often used by people without a checking account. A prepaid card, which Remitly lists as accepted, or a basic bank account can avoid the money order fee and the remittance tax. Some banks offer accounts without overdraft facilities aimed at people opening their first US account.
Where Pryme fits
A Pryme account can be opened from any country and holds USD and NGN with local details for each, which can replace paper instruments for regular sending. The app shows the rate and the fee before you approve; see Send. Outside Nigeria, Pryme's activities are carried out through regulated partners.
Questions people ask
Can I send money to Nigeria with a money order?
Some agent counters accept money orders as payment, but many app-based providers list only cards and bank accounts. Ask the provider first.
Is there a tax on money orders sent abroad?
Since January 2026, a 1% federal remittance tax applies when a money order is used to fund a remittance transfer, according to the IRS.
Do I need ID to buy a money order?
For cash purchases of $3,000 to $10,000 in a day, FinCEN rules require the seller to verify and record your ID. Sellers may ask at lower amounts too.
Can my family cash a US postal money order in Nigeria?
We could not confirm current acceptance from an official source. Check with the recipient's bank before mailing one.
Sources
- IRS news release IR-2026-48: proposed regulations on the remittance transfer tax (10 Apr 2026) · accessed Oct 2026
- IRS SB/SE procedural update: new remittance transfers tax (21 Apr 2026) · accessed Oct 2026
- Federal Register: proposed regulations REG-114499-25 on the remittance transfer tax (public inspection, 13 Apr 2026) · accessed Oct 2026
- FinCEN: Bank Secrecy Act requirements, quick reference guide for money services businesses · accessed Oct 2026
- Remitly: Send money to Nigeria from the United States · accessed Oct 2026
- CFPB: What is a remittance transfer and what are my rights? (last reviewed 3 Oct 2024) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.