WASHINGTON Jan 27 The U.S. Postal Service could
improve its financial stability if it started offering financial
services such as debit cards, small loans and check-cashing, a
postal agency watchdog said on Monday.
The U.S. Postal Service Office of Inspector General said
that the struggling mail carrier could tap into the 68 million
American adults who are under-banked and spend billions of
dollars every year on non-traditional services such as payday
This could bring in an additional $8.9 billion in revenue
annually to the agency, if just 10 percent of those under-served
turned to the Postal Service.
"While banks are closing branches all over the country,
mostly in low-income areas like rural communities and inner
cities, the physical postal network is ubiquitous," the
inspector general's office said in its paper. "The Postal
Service also is among the most trusted companies in America and
trust is a critical element for implementing financial
Rather than compete, the office said, the Postal Service
could partner with banks to gain expertise in those services.
Postal services in other countries including France, UK and
New Zealand provide financial services, which are a substantial
source of their revenues.
The U.S. Postal Service offered financial services from 1911
to 1967, but when interest in those services faded Congress
ended the program. The agency currently offers money order and
international money transfer services.
The Postal Service has been plagued by financial troubles as
more Americans pay their bills and communicate electronically
instead of sending stamped mail, and as it struggles to pay into
a health fund for its future retirees, as mandated by a 2006
The agency, which lost $5 billion in 2013, has sought
legislation that would relieve the pressure of the massive
retiree payments, shift to a five-day mail delivery service,
close some rural post offices and allow it to modernize its
business service offerings.
To raise revenue, the mail carrier recently entered into a
potentially lucrative partnership with online retailer
Amazon.com Inc to deliver packages on Sundays, and to
sell its services out of Staples Inc office supplies
On Jan. 26, the mail carrier also raised its prices for
stamps and direct-mail services, but it faces backlash from the
mailing industry. The Association of Magazine Media, the
National Postal Policy Council, the Envelope Manufacturers
Association and Greeting Card Association have jointly filed an
appeal to overturn the price changes.
Adding financial services, report said, would help partly
close financial gaps and also keep the Postal Service relevant.
"There is a clear market need for innovative financial
products, and millions of families would benefit from more
affordable solutions. Postal Service could be exactly what they
are looking for," report said.
(Reporting by Elvina Nawaguna; Editing by Steve Orlofsky)