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News
USPS weighs revenue for postal operators, and quarter of all U.S. households (about
34 million) have limited or no access
conditions may be ripe for similar
plunge into success for the U.S. Postal Service," to the traditional banking system.
The USPS said that these households,
said the Office of Inspector General:
68
United States Postal Service. "If just
million
about
representing
crowded GPR 10 percent of the money underserved unbanked consumers, "are treading
water very close to the economic
Americans
on
spend
currently
alternative financial services were
edge."
pool instead spent on more affordable The USPS feels it would be a natural
products from the postal service, it
could generate some $8.9 billion in fit to provide this demographic with
s mail volumes and con- new revenue." financial services, since it already
current revenue continue offers money orders and international
to plummet, the U.S. Postal The report noted that the USPS could money transfers. It said it already
A Service has proposed that become a more affordable alternative holds a 70 percent market share in
a general-purpose reloadable (GPR) to payday lenders, which charge domestic money orders and processed
prepaid card be created that would substantial fees for their services. The 109 million money orders in 2012 Via
help to bolster profits at the struggling USPS said it would not become a bank the GPR card, the USPS could offer
quasi government agency. Along with or compete with banks, but instead "new ways of transferring money
a so-called Postal Card, small-dollar partner with banks to offer alternative both domestically and internationally,
loans and money transfers could be financial services. and perhaps even include small loans
offered to unbanked customers at The postal lifeguard solution that would help customers overcome
postal locations, according to a Jan. unexpected expenses."
27, 2014, USPS report. The white paper Providing Non-Bank
Financial Services for the Underserved, The USPS also made the case that
"Around the world, financial services cited 2011 Federal Deposit Insurance banks are becoming less convenient
are the single biggest driver for new Corp. research that reported over a for the unbanked. In 2012 alone,
banks closed nearly 2,300 branches,
the report said. But these closings
are not spread evenly; most of them
occurred in low-income communities,
including rural and inner-city
neighborhoods, where unbanked
consumers live.
The USPS said 93 percent of bank
branch closings since 2008 have
occurred in ZIP code areas where
household income levels were below
the national median. In contrast, the
USPS said 59 percent of its postal
network is in ZIP codes with no
bank branches, or only one. Being
embedded in these communities
translates into brand identification
and trust, the agency added.
Sink or swim
The report characterized the
proposed Postal Card as the linchpin
to the USPS' ambitions. Such a card
would reduce the agency's overhead
costs associated with cash and check
payments and provide the unbanked
with a full-service financial product
that could be used to make mobile,
online and in-store purchases, as
well as facilitate bill payments, ATM
money withdrawals and money
transfers.
16
USPS weighs revenue for postal operators, and quarter of all U.S. households (about
34 million) have limited or no access
conditions may be ripe for similar
plunge into success for the U.S. Postal Service," to the traditional banking system.
The USPS said that these households,
said the Office of Inspector General:
68
United States Postal Service. "If just
million
about
representing
crowded GPR 10 percent of the money underserved unbanked consumers, "are treading
water very close to the economic
Americans
on
spend
currently
alternative financial services were
edge."
pool instead spent on more affordable The USPS feels it would be a natural
products from the postal service, it
could generate some $8.9 billion in fit to provide this demographic with
s mail volumes and con- new revenue." financial services, since it already
current revenue continue offers money orders and international
to plummet, the U.S. Postal The report noted that the USPS could money transfers. It said it already
A Service has proposed that become a more affordable alternative holds a 70 percent market share in
a general-purpose reloadable (GPR) to payday lenders, which charge domestic money orders and processed
prepaid card be created that would substantial fees for their services. The 109 million money orders in 2012 Via
help to bolster profits at the struggling USPS said it would not become a bank the GPR card, the USPS could offer
quasi government agency. Along with or compete with banks, but instead "new ways of transferring money
a so-called Postal Card, small-dollar partner with banks to offer alternative both domestically and internationally,
loans and money transfers could be financial services. and perhaps even include small loans
offered to unbanked customers at The postal lifeguard solution that would help customers overcome
postal locations, according to a Jan. unexpected expenses."
27, 2014, USPS report. The white paper Providing Non-Bank
Financial Services for the Underserved, The USPS also made the case that
"Around the world, financial services cited 2011 Federal Deposit Insurance banks are becoming less convenient
are the single biggest driver for new Corp. research that reported over a for the unbanked. In 2012 alone,
banks closed nearly 2,300 branches,
the report said. But these closings
are not spread evenly; most of them
occurred in low-income communities,
including rural and inner-city
neighborhoods, where unbanked
consumers live.
The USPS said 93 percent of bank
branch closings since 2008 have
occurred in ZIP code areas where
household income levels were below
the national median. In contrast, the
USPS said 59 percent of its postal
network is in ZIP codes with no
bank branches, or only one. Being
embedded in these communities
translates into brand identification
and trust, the agency added.
Sink or swim
The report characterized the
proposed Postal Card as the linchpin
to the USPS' ambitions. Such a card
would reduce the agency's overhead
costs associated with cash and check
payments and provide the unbanked
with a full-service financial product
that could be used to make mobile,
online and in-store purchases, as
well as facilitate bill payments, ATM
money withdrawals and money
transfers.
16
