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What is a Traveller's Cheque?

By R. Anacan
Updated: May 23, 2024

A travellers cheque is a check that is issued by a financial institution that can be used as a form of payment. Travellers cheques are most often used by those traveling because they are widely accepted as payment in many parts of the world, yet can be replaced if lost or stolen by the issuing financial institution. Travellers cheques are issued in a variety of monetary denominations such as the US Dollar, Euro, Japanese Yen, Canadian Dollar, Australian Dollar, and British Pound.

A customer should be able to purchase travellers cheques from most major financial institutions. At the time of purchase, the customer will be required to sign each individual travellers cheque. The signature is one of the security features of travellers cheques as the user will be required to countersign the check at the point of redemption. If the signatures do not match, the cheque will not be accepted.

At the time of purchase, the customer should be provided with a listing of the serial numbers of the cheques that were purchased. If any cheques are reported lost or stolen, most banks will require the customer to provide the serial numbers of the missing cheques. This allows the bank to verify the validity of the claim and the checks.

Even though travellers cheques can be replaced if lost or stolen, it is recommended that the user treat them as carefully as they would cash. The user should keep track of the cheques that are used as they are redeemed. The customer should also keep the travellers cheques purchase agreement and listing of the serial numbers separately from the cheques themselves.

Using a travellers cheque is a fairly simple process. The customer simply provides the travellers cheque to the merchant as payment. The customer will then need to sign the travellers cheque in the presence of the merchant. Once the merchant verifies that both signatures on the check match, any applicable change is given back to the customer and the transaction is completed.

Travellers cheques were first issued in the late 1700s by the London Credit Exchange Company, and Thomas Cook, founder of the British travel agency, issued notes similar to travellers checks in 1874, but the modern travellers cheque was invented in 1891 by an employee of American Express. The then-president of American Express, J.C. Fargo, was frustrated when he could not cash checks during a trip to Europe and sought to find a solution. Marcellus F. Barry came up with the idea of the countersignature feature on the check to ensure merchants and users that the cheque was indeed genuine. The idea quickly gained in popularity and was an immediate financial success for American Express.

Over time other companies offered their own versions of the travellers cheque and as advanced in transportation made travel easier and less expensive for the masses, travellers cheques were the preferred form of money for travelers. However the increased use of credit cards, debit cards and the prevalence of automated teller machines (ATMs) worldwide have led to a decrease in the popularity of travellers cheques today.

WiseTour is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By CoveredInIt — On Apr 03, 2011

Is it possible that Travellers Cheques are doomed to become as much of a relic as cheques? It could be that with the advance of plastic payment there is little or no need for TC when credit and debit is much easier and more lightweight.

Even if your card is lost or stolen it is far easier now to flag your account and some banks even offer (provided you have taken out the correct insurance) up to $2000 in emergency cash if you require it when abroad.

By nishanth — On Jun 22, 2009

In bank side. Will bank do re-evaluation for FT items?

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