on Oct 3rd, 2011
in Finances: Cost & Revenue
| 18 comments
When you buy your groceries, how do you pay for them? What about when you go to the gas station or neighborhood restaurant? How do you buy items online? Cash may still be king, but in everyday life, it is being eclipsed by newer digital payment methods such as credit cards, debit cards, and electronic transfers. These payment methods are often more convenient than carrying around lots of cash, but they are not equally available to everyone. People who don't have bank accounts or credit cards cannot access the full-range of digital currency products. One option that is available is prepaid payment cards. Prepaid cards are preloaded with funds and then can be used like a credit or debit card. They are the fastest growing form of digital currency. More and more people are receiving their pay through prepaid cards. Unfortunately, customers sometimes must pay predatory fees to redeem the cards for cash or reload them. Is this an opportunity for the Postal Service? The Postal Service has the trusted brand and a vast retail network to ensure national coverage. It has experience helping the unbanked and the underbanked. It has sold postal money orders for about 150 years. In certain areas, the Postal Service offers wire transfer service. Should the Postal Service look into upgrading its payment offerings for the digital age? A new OIG white paper Digital Currency: Opportunity for the Postal Service examines whether there is a role for the Postal Service in the world of digital payments. The paper finds that the Postal Service is well positioned to expand into new digital currency products such as prepaid cards because of its widespread network, trustworthy reputation, and longstanding experience in providing payment services. The paper also provides some suggestions for an implementation strategy. Click here to read the Digital Currency: Opportunity for the Postal Service white paper. What do you think? Are prepaid cards a good opportunity for the Postal Service? This blog is hosted by the OIG’s Risk Analysis Research Center.
on Sep 21st, 2011
in Finances: Cost & Revenue
| 3 comments
In a time when the Postal Service has suffered declines in volume and revenue across many categories, it has turned to the international market. For example, it has seized opportunities, including with China, to increase its overall market share in package and express business. But the Postal Service has to maintain an “international” infrastructure in order to efficiently receive and dispatch this mail flow. International Service Centers (ISCs) in Chicago, Los Angeles, Miami, New York, and San Francisco distribute and dispatch international mail. International Airmail Records Units are located within the ISCs which are part of the International Network Operation. These units validate mail records before transmitting information to the International Accounting Branch in St. Louis for billing foreign postal administrations. Currently, the records units are located in Chicago, Los Angeles, New York, New Jersey and Honolulu. In recent years, workload in Miami and Chicago were redistributed to other locations. Our office previously reported the records units operated in an obsolete, inefficient, and manual work environment resulting in the use of unnecessary work hours. Specifically, we found that these units supported more than 2 million hard copy records. Since then, the Postal Service has improved efficiency by implementing Lean Six Sigma methodologies to streamline processes and continues efforts to transition to a paperless environment. What additional opportunities exist to strengthen operations at International Service Centers and International Airmail Records Units to improve efficiencies and protect international revenues? For example, are there additional opportunities for consolidation? Are there additional steps the Postal Service can take to automate its processes and fully transition to a paperless environment? This blog is hosted by the OIG's Financial Reporting Directorate.
on Sep 19th, 2011
in Finances: Cost & Revenue
| 12 comments
Let’s take a simplistic view of the Postal Service by dividing it into two groups: Operations and Finance. Operations’ main concern is to make sure mail is delivered and other services are rendered to satisfy customers’ needs. On the other hand, Finance’s responsibility is to ensure that all the information stemming from the Operations side is captured for billing/payment and financial statement reporting purposes. After all, the Postal Service needs to be paid for their good work, doesn’t it? Based on audits of prior years’ financial statements, it seems Operations personnel were not always aware what financial impact their action or inaction had on the Postal Service when it came to the big picture. For example, Operations personnel might process the mail and deliver it to the customers’ satisfaction. However, internal supporting documentation and data might not have been updated in a timely manner. When personnel do not process documentation for services rendered according to Postal Service policy, the Postal Service risks losing money. Over the years, management has taken steps to provide Operations and Finance personnel with the bigger picture. They have advised the Operations side of their impact on the Postal Service’s financials and the repercussions of not completing processes correctly. The question is do you believe this endeavor has been successful? Let us know what you think in the comments section below. This blog is hosted by the OIG's Financial Reporting Directorate.
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