Post Office mulls financial services to unbanked and under-banked

The United States Postal Service may expand its financial services beyond money orders and remittances, the Credit Union Times reported Thursday.

U.S. Post Office officials think providing financial services to the under-served can help turn around the self-supported agency's fiscal fortunes.

U.S. Post Office officials think providing financial services to the under-served can help turn around the self-supported agency’s fiscal fortunes.

“More than a quarter of Americans live partially or completely without access to mainstream financial services and are often forced to rely on costly services like payday loans or check cashing to cover their everyday expenses,” the USPS said on its website, introducing a white paper released Monday by its Office of Inspector General.

The USPS is financially motivated to offer more financial services, saying in the white paper that if it captured just 10 percent of the current unbanked and under-banked market, it could result in $8.9 billion in new revenue each year.

Possible financial services, according to the paper, could include reloadable prepaid cards, mobile transactions and products that help the underserved take part in e-commerce. They also could include new ways of transferring money both domestically and internationally, and perhaps even include small loans that would help customers overcome unexpected expenses, the report said.

The paper was especially bullish on payment services, because they have the lowest barriers to entry for the USPS, because they are the most similar to what it already offers. Payment services also generally do not require a major capital investment, and are full of opportunities to partner with banks, the report said.

One possible cornerstone product identified by the report was a Postal Service branded open-loop reloadable prepaid card.

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