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Facing dire financial straits and fending off bankruptcy, the United State Postal Service could make an entry (in truth, a re-entry) into the financial sector by providing a suite of monetary services, which might generate an approximated $8.9 billion in annual revenue.
According to a white paper published by the company’s Workplace of the Inspector General, the Postal Service can providing services that include a reloadable prepaid card (potentially with the ability to earn interest), fundamental check-cashing, Post Office ATMs, mobile applications and a payday advance loan option.
Such providings hint at an effort to steal market share from banks, but the Postal Service declares that it isn’t competing for bank clients.
“To the contrary, we’re suggesting that the Postal Service, could significantly complement banks’ offerings,” the report said. “The Postal Service is well placed to supply non-bank financial services to those whose needs aren’t being fulfilled by the traditional monetary sector.”
With this venture, the agency would target the 68 million American grownups who don’t utilize or get standard forms of bank products and loans. If 10 percent of the underserved market utilizes the Postal Service, roughly $8.9 billion might be produced per year for the firm.
The recommended prepaid card, appropriately named the Postal Card, would be issued by a partnering bank and it could be made use of like a lot of debit cards for purchases at shops and cash withdrawals at ATMs. An interest-bearing feature could be added to motivate savings. Mobile applications, Post Workplace ATMs and partnered ATM networks would allow cardholders to gain access to and handle their accounts.
Another recommended product is a payday-loan option that makes use of a borrower’s tax refund as collateral.
Not the first look in the monetary industry
A limited number of financial services are currently available through the Post Office today. The Postal Service already provides domestic and international money orders and electronic money transfers to 9 Latin American countries.
In 2011, the company began offering American Express gift cards as part of a market test that’s because expanded to seller present cards from the likes of Amazon, Barnes and Noble, Macy’s and more.
From 1911 to 1967, the Postal Service provided cost savings products that under a financial system that held deposits. Nevertheless, due to a decrease in use, the system was ended.