• 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 May 16th, 2011 in Ideas Worth Exploring | 21 comments
    Advertising mail is a core product for the U.S. Postal Service. It is an important way for businesses to reach their customers, but many local small businesses and others underuse or avoid advertising mail. The rules, rates, and regulations can be complex and confusing. For saturation mailings, simplified addressing allows businesses to use a simple “Postal Customer” address instead of a full street address. While the Postal Service has tested a number of simplified address products in the past, early this year it rolled out a national product available for all “flat-size” saturation mailings. In a recently released white paper titled Simplified Address Mail: An Easier Way for Small Businesses to Reach Local Customers, the Office of Inspector General, Risk Analysis Research Center lays out the advantages of the simplified address mail concept, which could potentially bring in over $1 billion in new revenue if fully implemented. Among the paper’s key findings:
    • Simplified address stems from the Postal Service’s core, hard-copy mail delivery business and could help keep mail relevant in an increasingly digital world.
    • Adding profitable simplified address mail volume could lower average unit costs and make universal service more affordable for all current and potential mail users.
    • Simplified address makes advertising mail easier to use and far less expensive for organizations that have traditionally shied away from directly using the mail.
    • Simplified addressing has long been the standard practice among foreign posts and often accounts for a significant proportion of their mail volume. The Postal Service has been the sole exception.
    The key to realizing all the benefits of simplified address mail depends on how the Postal Service implements the program. It must actively be promoted to small businesses and others and it must be made as easy as possible for customers to use. So, what do you think? Would you be receptive to receiving advertising materials for the restaurants, stores and services in your local neighborhood? This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Jan 24th, 2011 in Mail Processing & Transportation | 7 comments
    The Postal Service established International Service Centers (ISCs) in 1996 to become more competitive in the international mail market. ISCs distribute and dispatch both incoming and outgoing international mail. The ISC network has facilities located in five major cities: New York, Miami, Chicago, Los Angeles, and San Francisco. The Postal Service hoped that ISCs would improve service and provide the structure needed to support new products and increase revenue. However, International Mail volume has not increased as projected by the ISC marketing and sales plan. During the period FY 2007 to FY 2010, International mail volume declined by approximately 29 percent (from 858 million to 609 million mailpieces). Although the Postal Service reduced expenses by nearly $6 billion in fiscal year (FY) 2009 and by almost $789 million during the first three quarters of FY 2010, the reductions have not been sufficient to offset declines in mail volume revenue. Consequently, the Postal Service is reviewing its mail processing and retail networks to remove duplication and make them more efficient to reflect current mail volumes. In light of international mail volume declines and the Postal Service’s current financial condition, does the Postal Service still need a separate network to handle international mail? Are there other options the Postal Service could pursue to increase International mail volumes and revenue? Please share your comment(s) on how to make the ISC network more profitable, effective, efficient and economical. This topic is hosted by the OIG’s Network Processing Audit Team.

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