Friday, February 28, 2014

USPS Considers Adding Banking Features

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The United States Postal Service (USPS) is exploring new revenue outlets in order to offset its financial difficulties. A recent report released by the U.S. Postal Service Office of Inspector General (OIG) has suggested that the USPS could offer financial services to America’s millions of unbanked and under-banked individuals.

Unlike banks, the USPS has access to all parts of the country and could provide a banking alternative to individuals living in these neighborhoods. Since it can be hard to find a bank in many of the poorer neighborhoods—both inner city and rural—this leads to residents having to rely on nontraditional banking services (i.e.--check cashers and payday lenders). Services such as these have bad reputations because they are expensive for customers with their high interest rates.

The report released by the OIG states that the check cashing and payday loan industries brought in about $89 billion in 2012 so it is easy to see why the USPS would see vast potential in offering this new service. In such early stages of discussion it is unknown what level of consumer protections the USPS would offer. If the USPS implements this service they will be offering consumers general purpose reloadable cards (GPR). GPR cards do not have as many consumer protections built in as a payroll debit card offered by an employer; however, GPR cards would provide people in underserved areas access to a bank account and the opportunity to implement direct deposit. This would make the new system a win-win situation for not only the postal service but employers and residents of underserved areas as well.

Continue to check back with Pay News Now for updates on this situation as it unfolds.