(July 16, 2014) Neither snow nor rain nor heat nor gloom of night will stop the U.S. Postal Service from … providing non-bank financial services?
In a January report, the U.S. Postal Service Office of Inspector General proposed that the USPS offer non-bank financial services to consumers who don’t have access to affordable, mainstream financial products.
The proposal is being discussed today during a conference hosted by Pew Charitable Trusts, which also unveiled findings from a national survey of public attitudes on financial services and the post office. The conference will end around 5:15 p.m. and is being webcast.
According to the January report by the USPS Office of Inspector General, the USPS thinks it is well positioned to provide non-bank financial services.
“The Office of Inspector General is not suggesting that the Postal Service become a bank or openly compete with banks,” the report read. “To the contrary, we are suggesting that the Postal Service could greatly complement banks’ offerings. The Postal Service could help financial institutions fill the gaps in their efforts to reach the underserved.”
Some of the Postal Service’s current products and services include domestic and international money orders, and electronic money transfers to nine Latin American countries through the Dinero Seguro service. And since 2011, the USPS has sold prepaid debit cards in the form of open-loop American Express gift cards in a market test.
And with the declining mail volume, post offices are looking new revenue streams. After letter mail, the report stated that financial services are the single biggest driver of revenue for posts around the world.
“Financial services have been an even greater source of new money than parcel delivery and logistics, accounting for an average of 14.5 percent of revenue for postal organizations in industrialized countries in 2012,” the report read.
The report proposed that the USPS offer payment services, such as an open-loop reloadable prepaid card; products to encourage saving; and small loans. According to the Consumer Financial Protection Bureau, an open-loop prepaid card is a card with a network logo on it (Visa, MasterCard, American Express or Discover) and it can be used at locations accepting that brand.
And according to a survey by The Pew Charitable Trusts, the general public is largely indifferent to the USPS offering non-bank financial services.
The survey found that 63 percent of the general public said it wouldn’t matter if the USPS offered prepaid debit cards in branches, where customers could deposit checks or cash onto the cards, use the cards for purchases, or withdraw cash at an ATM. The survey showed 27 percent in favor and 10 percent against.
The findings were similar when asking about banks or credit unions operating a window at post offices, where customers could open or access checking and savings accounts. The survey found 58 percent of the general public said it wouldn’t matter, 28 percent are in favor and 14 percent against.