An IG report could boost a push to extend the Postal Service’s role in providing financial services, saying that while questions would have to be answered, the concept in general is feasible.
Employee unions and some advocacy groups have been arguing that rather than continuing to close facilitiesto save costs, USPS should be making fuller use of them, especially in areas under-served by traditional financial institutions.
The report notes that more than a quarter of households either don’t have a bank account or do have an account but also use other options such as purchasing money orders. USPS already is the largest supplier of money orders, selling 97 million with a face value of $21 billion in 2014, it said.
“Through its unmatched nationwide retail network, the Postal Service also offers international money transfers, prepaid gift cards, and limited check cashing. The 13 million people who use these products — many of whom are regulars who come in every month — could be a ready-made customer base for new postal financial services,” the report said.
It added that USPS has authority to expand into certain new products and services without legislation. These could include payroll check cashing, domestic money transfers between post offices, bill payment services, international money transfers to additional countries, and other affordable products. The IG estimated that a suite of expanded financial services based on what the Postal Service may be able to offer under current law could bring in $1.1 billion in annual revenue after a five-year ramp up, while covering costs and contributing to profits.
