Banking with USPS

Banking with USPS

It’s a beautiful, sunny day with a slight, crisp chill in the autumn air. You arrive at the local Post Office, package in hand, and step into the warm lobby. The clerk at the counter greets you with a smile and asks, “How may I help you?”

After processing the package and determining postage, you reach into your pocketbook and withdraw your Postal Savings debit card for payment. The interest you earned on your savings has more than paid for the price of postage for the package, and you happily swipe the card in the reader.

In the early half of the 20th century, customers routinely deposited money into their Postal Savings account, earning interest on its balance. Though the Postal Savings System ended in 1966, many Post Offices around the world continue to operate a similar system.

Post Offices in India, Japan, South Korea, and many others offer their customers a variety of financial services, expanding both their customer base and income stream. These services come with the backing of the Post Office and the brand image associated with a trusted company.

USPS is one of the most trusted organizations in the United States. Its reputation and world-class services are well known, and its customers know that there is no better value for their shipping solutions than their local Post Office. Reintegrating banking services into the Postal Service could have the effect of increasing its revenue base from financial services while simultaneously expanding its mailing business from increased foot traffic in its local branches.

The endeavor wouldn’t be a quick solution to increasing postal revenue as there are many infrastructure enhancements and procedures to establish to ensure necessary financial rules and regulations are followed. Still, the long-term prospects of a renewed Postal Savings System could be lucrative enough to reestablish the once thriving service.

If the Postal Service were to return to offering savings accounts for customers, what other types of financial services do you think it could offer?

Greeting Card Association Offers Tips to Enhance USPS

Greeting card association

Many organizations have an idea on how they would enhance the finances of USPS. Recently, the Greeting Card Association (GCA) added their suggestions on what implementations they like to see.

Among the list of more than 100 proposals in their report titled A Commonsense Solution for a Stronger Postal Service, the GCA suggests three paths to improving the financial direction of USPS. The first is to implement widespread adoption of cluster boxes. The GCA estimates that the Postal Service will save $4.5 billion annually by reducing door-to-door delivery points. The second is to end or severely reduce the prefunding of retiree health benefits to save $5.6 billion annually. Third, the GCA recommends implementing a collection of other proposals among their list to provide the additional savings necessary to solve any remaining deficit issues.  

Other GCA suggestions for USPS include:

– Selling real estate assets, which the GCA estimates at $85 billion, and leasing back the space USPS needs.

– Offer non-postal services such as photocopy, fax, Internet, and ATMs.

– Offer early retirement incentives.

– Eliminate layoff protection in collective bargaining agreements to cut 125,000 career employees by 2015.

– Outsource work where cost effective.

– Close 12,000 retail facilities.

– Close 300 processing plants.

– Relax delivery standards to facilitate plant closings.

– Increase employees’ contributions to CSRS and FERS.

– Provide emergency government services and interactions.

By offering its suggestions for a stronger Postal Service, the GCA hopes to avoid other cost cutting measures such as eliminating Saturday delivery or increasing mailing rates.

The report can viewed in its entirety by clicking here.

What do you think about the ideas proposed by the Greeting Card Association?

Crowd Funding New Ideas

0524131158

In recent years, receiving a small business loan from a financial institution has become difficult to obtain. Tighter lending standards, additional asset qualifications, and tougher scrutiny over business plans have cause some to seek alternative options. One of those options is to seek financial help from the potential audience of the project.

To help get the funding he needed to transform a product idea into reality, a high school student in Utah enlisted the aid of Kickstarter.com. With the help of generous donors, he was able to produce his outdoor game made with wooden blocks. More than 300 games have been sold to date, and his shipping provider of choice is the U.S. Postal Service using Priority Mail Large Flat Rate Boxes.

When traditional funding sources aren’t within reach, a well-crafted pitch to potential backers on a crowd funding website could generate the needed resources to turn a dream into a reality.

What are some of your experiences with crowd funding projects?

Swiss Post to Spin Off Bank

Swiss Post to Spin Off Bank

PostFinance, the banking arm of Swiss Post, may soon be spinning off from its parent company in the summer of 2013. However, independence from the Post won’t place it on the same playing field with other banks in the industry, as certain restrictions still apply.

When PostFinance begins life as its own separate entity, Swiss Post will still, technically, own it. The Post will own all shares of the financial institution when it ventures out on its own. This places ownership of the bank squarely in the hands of the Swiss government, as they own the Post Office.

As a state owned entity, PostFinance will continue to be subject to restrictions that prevent it from engaging in certain competitive activities that could take business away from existing banks. This limitation is welcome news to competing banks, but that insulation may not last indefinitely.

Currently, PostFinance is prohibited from issuing loans. Considered a major revenue source for other banks, the postal bank must direct customers seeking loans to other financial institutions. This lucrative business has seen an uptick in demand as the country recovers from the recent financial crisis. When PostFinance shares eventually transfer into the hands of the public, the rules that limit its growth as a state-owned organization have the potential of being removed. If that were to happen, an unshackled PostFinance could prove a worthy competitor in the business and mortgage loan market.

Do you think a postal entity should be able to compete with private businesses in traditionally non-postal related markets?

Sales Lead Means Money in the Bank for Investment Company

Mary McCarver, a clerk in Vancouver, WA, was helping a customer mail letters when she learned that his company, Fisher Investments, shipped many flats for marketing purposes to potential customers using UPS. From Mary’s conversation with the customer, she felt that USPS could offer a better solution for him. She contacted Mailing Solutions Specialist (MSS) Tory Foster and submitted the sales lead through the Employee Engagement Program (EEP).

Foster met with the Operations Manager at Fisher Investments, a financial advising company that provides clients with stock information and investing tips, and discovered that they used UPS specifically for its fast delivery service. The company wanted the most rapid response possible to have a better chance at closing a sale with potential customers when sending out promotional material. While speed was vital to the company, they also believed that saving money was also very important.

Foster presented First Class Mail as a potential solution since the vast majority of their flats weighed much less than thirteen ounces. He described the value of First Class Mail, such as speed, free forwarding and returns, Saturday delivery, and strength of reaching a broad consumer market. The lower price structure for First Class Mail was also discussed, as well as the additional option of presorting their mail for an even better rate.

Fisher Investments was impressed with the value USPS represented over their current service with UPS, particularly when they learned that USPS would get marketing information to consumers while they were still in a buying mode. The value of USPS services was more than enough to prompt Fisher to switch their business to the Postal Service. The move saved the company approximately $1,500 a day on average using First Class Mail over competing products, and earned the Postal Service approximately $260,000 in new annual revenue.

Banking on Growth

Japan Post is banking on its customers for its future growth. Literally.

Japan Post Bank Co, LTD is a wholly owned subsidiary of Japan Post Holdings, LTD. It began operations as a bank on Sep. 1, 2006 and offers more than just standard savings accounts. Japan Post Bank provides a variety of banking services including housing loans, card loans, credit cards and retirement planning. They also offer investment products designed for low cost, long-term holding, encouraging people to save for their future.

Is the banking industry worth getting into with so much competition already out there? Let’s delve into the numbers and find out.

After tax net income for Japan Post Bank for the fiscal year ending March 31, 2012 was 334,850 million yen. That’s the equivalent of $4.181 billion in U.S. dollars. That’s quite a hefty sum after being in operation for less than six years.

Dr. Sheldon Garon, professor of History and East Asian Studies atPrincetonUniversity, stated that such additional services could increase revenue during a time when the Postal Service is facing declining mail volume. Such “creative” ideas could be a way for the organization to experience greater revenues.

Japan Post banked on their customer loyalty to gain market share in the financial services industry, and that gamble paid off. Do you think USPS would have similar success if it did the same?

Ballparking for the Future

If you’ve got a few years to go until retirement, there’s a chance that you might be interested in a new tool provided by the Office of Personnel Management. The Federal Ballpark E$timate is designed to let someone know just how much they need to save to have a comfortable retirement.
 
Before the Ballpark E$timate can give you the scoop on your projected earnings in retirement, however, it’s going to need to gobble up a few pieces of information first. Be sure to have your hire date, current income, the age you want to retire, and the number of years you expect to enjoy your retirement available. You’ll also need your current TSP balance, non-TSP savings, Social Security benefit information, and a few assumptions on inflation and investment rates of return. Don’t let those last ones scare you though. You can use the default values to move on to the good stuff.
 
Once all of this information is processed by the system, the Ballpark E$stimate will present a detailed report outlining the income you’re likely to see in retirement. Keep in mind that this is only an estimate, but it’s a starting point to see whether or not you’re on track to having a comfortable retirement.
 
The best time to start saving for your future is now.
 
What plans do you have to enjoy your future or current retirement? Comment here.
  • Hello, I'm Benny the Blogger: I'm the world's most famous postal employee. My hobbies are snappy quotes, kite flying and publishing. I was born Jan. 17, 1706, but don't call me old.

  • Subscribe to Your Postal Blog today and join in on the discussion.

  • Click on the earphones above to listen to the latest edition of Your Postal Podcast.

  • Click on the image above to download the latest edition of the USA Philatelic Catalog

  • Want to take Your Postal Blog with you on the go? Click the QR code below and go mobile.

%d bloggers like this: