The Postal Service's Inspector General is urging the service to develop new lines of business. (Stephen Lam / Getty Images)
The Postal Service should offer financial services, such as prepaid cards and check-cashing services to broaden its reach to millions of under-served Americans, according to a new report.
The Jan. 27 Postal Service Inspector General report said 68 million adults spent about $89 billion on interest and fees for such financial services in 2012, giving the Postal Service an opening to provide the same services at lower rates and make billions of dollars a year in new revenue.
“The Postal Service is well positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector,” the report said.
The Postal Service could partner with banks to offer financial products and then leverage its vast retail operation to provide those products in-person, especially in low-income or rural areas where people need them most, according to the report.
“With affordable financial offerings from the Postal Service, the under-served could collectively save billions of dollars in exorbitant fees and interest,” the report said.
Potential postal offerings could include:
■A re-loadable, prepaid “postal card” that would allow users to load paychecks or cash onto it and then use it to withdraw money from ATMs or pay for goods and services.
■Online and mobile services to help people check their card balances, transfer funds and provide apps to allow users to deposit checks by taking a photo.
■Small, short-term loans to eligible customers at lower interest rates, saving consumers billions of dollars.
Offering these financial services would not only bring in new revenue for the Postal Service but also boost the economy by reducing bankruptcies and putting more money in the hands of consumers, according to the report.
“As the Postal Service continues to look for new ways to serve the citizens of the 21st century, non-bank financial services may be the “killer app” for diversifying its revenue base,” the report said.