The U.S. Postal Service is best known for delivering the mail. But did you know it’s also the number one seller of the most widely used type of alternative financial service in the United States? We’re talking about money orders, which function like prepaid checks. The Postal Service sold a whopping 97 million of them with a face value of $21 billion in fiscal year 2014.

The Postal Service also offers international money transfers, prepaid gift cards, and limited check cashing. From 1911 to 1967, it even offered savings accounts through the Postal Savings System, which prompted millions of Americans to move a portion of their nest eggs from under the mattress into savings accounts.  

In our recent white paper, The Road Ahead for Postal Financial Services, we explore how the Postal Service could expand its financial offerings to benefit Americans and generate much needed new revenue. (This is a follow-up to our January 2014 paper, Providing Non-Bank Financial Services for the Underserved.) We hired financial consultancy Mercator Advisory Group to help us look at the pros and cons of several different approaches the Postal Service could take. But we dove deepest into what it probably is allowed to do under current law; namely, beef up and improve existing products and expand into adjacent, related services like payroll check cashing, domestic electronic money transfers between post offices, and walk-up bill paying. Our analysis shows that – assuming Postal Regulatory Commission approval – a suite of these potentially allowable products could, after a 5-year ramp-up, bring in $1.1 billion in annual revenue while covering costs and contributing profits.

We welcome your input. 

Should the Postal Service look at new business lines that are not directly related to mail and delivery?
 Which financial products do you think the Postal Service should provide? 
What do you think are the biggest barriers to success in postal financial services?  

Comments (79)

  • anon

    Dear inspector general, I believe that the constitution entrusted the congress of the unites state with the right to coin money and finance the government. The fed is a monopoly and we as americans hate monopolies. I tell you that if i could go to my post office to conduct my banking where i could open a savings account that matched or beat the rate of the feds inflation i would do so tomarrow. I have had more than my share of bad experieces with banks and the only account i have is a savings account so that i can cash my check and my tax returns with and save a little money. But with banks paying 1/10 of 1% intrest i am loosing money. do us a favor and help us get away from these crooked bankers.

    Apr 16, 2017
  • anon

    Dear Inspector General, I am writing to express my enthusiastic support for Postal Banking. The Postal Service is reliable, has thousands of locations and is a centuries old trustworthy public institution. Banks have proven time and again that they are anything but trustworthy. The sub prime mortgage scams that led to the financial meltdown, the more recent fraudulent banking practices of Wells Fargo, and the outrageous fees, charges and interest rates that all banks and credit card companies levy upon the poorest and most vulnerable Americans are but a few reasons America needs Postal banking. The banking industry and corporate bankers have only their own self interest at heart and are not concerned with the financial well being of the average American family. Please do all you can to make Postal banking a reality for the American people.

    Mar 07, 2017
  • anon

    Dear Inspector General, Please do everything in your power to restore Postal Banking. It is reprehensible to think that the poorest among us are being taken advantage of by predatory payday loans and other predatory lending practices. Postal Banking can at once strengthen its own financial position, and help Americans better manage their finances. It cannot happen soon enough. Sincerely, Susan L. McClain Manchester, CT 06040

    Feb 14, 2017
  • anon

    "Gift Card Mail Rebate Center Gift Card Mail Promotion 16-88722" Which gift cards qualify for this promotion? I cannot find the list anywhere and the postal clerk has no idea either! Thanks, Dawn

    Dec 05, 2016
  • anon

    As a social scientist with expertise in equal access to public services, I see Postal Banking as ranking among the most practical and immediate actions for improving economic equality in the United States. I learned a lot from the white paper pulications of the USPS OIG, and thank the office for exploring these options. I would like to reinforce that scientific, objective analysis reveals virtually no counterarguments to the proposal for Postal Banking at this time in American history. In times of severe economic inequality, I am particularly concerned about predatory financial practices. Though I am now a proud resident of California, I spent most of my life in the Northeast tri-city area where payday loaning is criminal usury or much more regulated. I was devastated to learn about how common and unregulated the payday loan industry is here in California. Given how powerful this industry is, I am not confident that pushing for regulation or reform from California State Legislature is a realistic venue. However I do believe that taking advantage of pre-existing USPS infrastructure to offer alternative, fair, and publicly accessibly alternatives can help mitigate some of the damage to our underbanked communities. I welcome the USPS Office of the Inspector General or any other office therein, to contact me for any further for empirical social scientific research that describes how many populations can benefit from this service. Thank You, Sonya Rao, UCLA Department of Anthropology

    Nov 14, 2016
  • anon

    Should the Postal Service look at new business lines that are not directly related to mail and delivery? It's not a question of should as much as it is a question of whether there will be a public benefit. The answer is emphatically yes. As a resident in an underserved community, residents in these communities are subject to excessive fees for which those with higher incomes and bank accounts do not sustain. In the state where I reside there aren't many check cashers but the ATM fees are excessive. Which financial products do you think the Postal Service should provide? A Savings account and a no fee checking account would be a great help to folks, including no fee ATM's What do you think are the biggest barriers to success in postal financial services? The Bank lobby and their influence on policy makers. Corporations that pushing for the demise of PO as a public entity.

    Nov 02, 2016
  • anon

    I live in San Bernardino, CA which according to research is the 7th largest unbanked/underbanked mid-city population cities in the nation. We could benefit from terrific ideas such as postal banking that save people over $2k over their own money when they usually spend it on predatory loans. We also don't have a reliable resource to our government. Historically, post offices always served as the community engaging resource to find out about local events and speak with neighbors. Help us!

    Sep 06, 2016
  • anon

    I am surprised that there is a continued push to be a sort of "bank of last resort" for the poor, yet the post office has not moved in this direction for broadband and cellular services. The original role of the post office was to function as a simple and effective way to ensure information distribution in the early days of the United States. Why then have we not seen a push from the Post Office to take this to the digital realm? The USPS is perhaps uniquely positioned to take unused portions of the cellular spectrum and offer low cost LTE access by deploying transmitters at rural post offices. This mission of providing cheaper internet access could be expanded by moving the approval process for operating rights telecom companies to be put under the postal service.

    Jun 12, 2016
  • anon

    I think the Post Office should be able to cash checks for people. The banks charge $5 or more to cash a check. That's crazy! The infrastructure is already there. Maybe charge 25 cents or some small amount to bring in some revenue. It would be incredibly helpful to folks without a checking account if the Post Office cashed checks.

    May 24, 2016
  • anon

    Postal banking would create union jobs with good pay and benefits in both urban and rural areas. It would also help put shady payday lenders out of business and put over $2,000 back into the hands of struggling families every year. I strongly support payroll check cashing and bill paying.

    May 23, 2016
  • anon

    I am strongly in favor of postal banking. Too many Americans are not served by traditional banks, and payday lenders - with annual interest rates that can approach 300% - are exploiting the most poverty-stricken among us. I have read about the U.S. Postal Service's struggles to stay financially solvent, and I think that adding banking - including small loans - to the services the USPS provides will be a win-win for the organization and for many financially-struggling Americans.

    Apr 23, 2016
  • anon

    Offer savings accounts with decent rate like Credit Unions. I am not near CU but go to post with my kid all the time. I would like her to learn savings easily. But you probably can't since the big banks rule the Congress. Sorry Dan

    Dec 15, 2015
  • anon

    This is an excellent idea and a needed resource in low income communities plagued by check cashing and payday loan predatory businesses. The post office has experience with financial instruments like money orders and money transfers. Going back to a historical tradition of check cashing and savings on small amounts of money would not be a stretch. Rather than simply mandating interest caps (which usually end up as hidden fees anyway), open up the market with this new option. It will naturally limit the outrageous behavior of the payday loan and check cashing businesses. I wholeheartedly support this idea and know a lot of people would use it.

    Oct 31, 2015
  • anon

    I put an important letter in my mail box that needed to reach the Drs. office quickly Nine days later I get a call from the office stating it just got there .This is so ridiculous ! I find my mail across the Rd on the ground from my mail box. The post office fails to answer phone calls.

    Oct 29, 2015
  • anon

    The U.S. Postal Service providing non-bank financial services for citizens at post offices would be a win-win for local communities, postal employees, and the financial viability of the USPS. This would represent a much-needed public service, particularly for those citizens who are not currently participants in the commercial banking system, to provide them with better choices in the financial marketplace than many of them currently have. I support it.

    Sep 29, 2015
  • anon

    I remember my mother using Postal Banking services when I was a teenager. I never really understood why the USPS stopped providing that service, until I became an adult and realized that the banking industries powerefull lobby had it abolished. Congress should pass legislation to eradicate Payday lenders and allow the USPS to provide banking services in their sted.

    Sep 10, 2015
  • anon

    I think postal banking would provide a much needed service and would be a logical use of a beloved American institution with the infrastructure and branches already in place. I hope this happens in the near future.

    Sep 05, 2015
  • anon

    I fully trust the USPS and fully support it's expanding of it's financial services. I'm getting pretty tired of the outsized profits and poor service of the banking industry and based on the type of service I get from the USPS I trust them to do as good a job in whatever financial services they are allowed to do.

    Sep 04, 2015
  • anon

    Postal Banking? Great idea! There is precedent in banking services at the Post Office, decades ago it was reality. The low cost, easy access of banking services at your local Post Office would be a welcome addition to both inner city as well as, rural locations. There are many small towns in this country that have a Post Office but, no bank. Offering savings accounts as well as, other services would be a popular option.

    Sep 02, 2015
  • anon

    Dear Sirs and Ladies of the Inspector General's office-I am strongly in favor of having postal baking for 2 reasons. First reason is that postal banking can help 68 millions of people who normally can't get banking normally. The second reason is that postal banking can get much needed revenue for the postal service. At least 1.1 billions of new dollars can be added to the revenue of the post office. I see that as a very good thing for the postal service. Thank you for allowing me to have imput in this issue. Good day.

    Aug 27, 2015
  • anon

    I absolutely think the USPS should get into providing banking services. What a huge source of untapped revenue! Of course the banking industry would hate this. Take away profit from them. If they are against it, it will probably be great for consumers. They could offer all kinds of banking products including payday loans. The only places that offer these right now charge outrageous interest rates of 200% and more. Insane! I think this would be a huge money maker for the PO. I'm all for it! Thanks for reading.

    Aug 27, 2015
  • anon

    The Postal Service should provide Postal Banking, there are a lot of areas of this country that don't have banks.

    Aug 24, 2015
  • anon

    Absolutely the USPS should get involved and develop consumer driven financial services! Promote more broadly Postal Money Orders, check cashing, and walk-up bill pay along with online money transfers such as Pay Pal or Western Union respectively. The biggest threat to Postal financial services are Washington Lobbyist. That being said, and I cannot stress this enough is customer service training along with the proper computing tools, backup systems, and encryption protection! It makes sense, it is a Golden Opportunity.

    Aug 22, 2015
  • anon

    I am a retired postal clerk. I have always felt that the Postal Service is missing a tremendous opportunity to make a lot of money by offering an express money order and I submitted a formal suggestion regarding this matter over 15 years ago. Basically, a customer could purchase this express money order and have it sent electronically to any Post Office and be immediately available to whomever the customer identifies as the receiver. Very similar to what Western Union does. However, considering the number of Post Offices, this service would be far superior. Additionally, the service could be expanded with an additional fee to allow the money order to be delivered to an address if so desired. Its really a no brainer. Why are we not doing it!

    Aug 20, 2015
  • anon

    Postal banking is an idea long overdue for implementation. This is an opportunity for the USPS to show underserved communities that someone is interested in their financial difficulties and is willing to help. Think of all the potential new postal customers which could be generated simply by the USPS being willing to do something that the banking industry will not...help who cannot afford the fees of most banks or live in areas served only by currency exchanges and payday lenders. This is a win for everybody.

    Aug 20, 2015
  • anon

    This is a great idea and it would help those people out that can't cash checks at a bank because they don't have a account. also then they wouldn't be indebt to the pay day leaders!

    Jul 03, 2015
  • anon

    Absolutely! I strongly support the expansion of the USPS into financial services as a viable business line that would offer expanded and valuable customer services, especially to sectors of American society that now lack low or no-cost mechanisms for fiscal transactions and short-term loans. Death to the payday lenders who charge outrageous interest rates and snare people into a cycle of never-ending debt payments.

    Jul 02, 2015
  • anon

    Bill paying, ID's, banking, and voting should have been incorporated into the USPS years ago.

    Jun 26, 2015
  • anon

    The USPS should serve all American's with extended hours, postal banking, more employees at the window, more passport hours and full time carrier employees.

    Jun 26, 2015
  • anon

    I am a resident of a small town (Covington, GA) and would certianly take advantage of certian essential banking services that the U.S.P.S. might offer.

    Jun 26, 2015
  • anon

    Correct me if I'm mistaken, but didn't the Post Office used to offer basic banking services back in the days before it became a stand-alone version of its former self and the Postmaster General was bounced as a Cabinet member? I think it is long past time to restore the Post Office to its former importance in this country.

    Jun 26, 2015
  • anon

    I support this initiative especially " The development of credit union-type savings and micro-loan programs are badly needed by the working poor as an alternative to predatory businesses that thrive from their misery.”

    Jun 26, 2015
  • anon

    As someone who worked both as a letter carrier and a window clerk, I feel that the USPS universal delivery and retail service networks are underutlized. Both were built with public revenues at a time when the post office was still a federal agency, and decisions about how to use them should be made with the idea of maximizing benefits to the public. It would be of enormous benefit to the American people to offer a non-profit alternative to increasingly asggressive payday lenders who prey upon people experiencing difficujlt financial services. I was recently in Barcelona, where I walked into a post office and found a banking window in the front lobby. There are other countries where the notion of postal banking has been applied successfully. Thank you for giving this idea serious consideration.

    Jun 26, 2015
  • anon

    On our 1st jaunt to Europe in 1970 we were amazed that you could do so many things both communication and financial at the old Post Office ! Later went to work as a clerk for the USPService and eventually retired from it. Still think the European model a good service for the customer ! Hope we can install and instill in our own USPS ! !

    Jun 26, 2015
  • anon

    My father was a letter carrier and postql employee for most of his work life. I want to help the US Post Office become strong again, and postal banking is a step in that direction.

    Jun 26, 2015
  • anon

    Postal banking would be solution to at least two problems: revenue generation for the Postal Service and access to banking services to our poor and working class people. I support this idea and hope that USPS re-establishes this program soon.

    Jun 26, 2015
  • anon

    The USPS is vital. Enhancing its services would help diminish, and hopefully end payday loan usury. It would help the poor to better handle finances, with the return of banking. Congress has put horrific constraints on the USPS's ability to make profits. It is time to change that.

    Jun 26, 2015
  • anon

    We need our post offices! I am very much in favor of postal banking. We have the bricks & mortar and the staff (used to handling money). All we need is the will to say "No!" to those profiteers chomping at the bit to privatize an American institution that is the envy of the world! Let's take the business away from those check cashing and payday lending places, the parasites! Save the Post Offices!

    Jun 26, 2015
  • anon

    As the President of the National Postal Mail Handlers Union Local #322, I am commenting in support of expanding Postal Banking. Most, if not all, of my members (and their family members) are in support of it as well.

    Jun 26, 2015
  • anon

    In my neighborhood there is two banks for people with middle-class income or aspirations, and three "check cashing" operations for poorer ones. designed to get people into debt and keep them there. Around the corner from each other are a UPS store and our neighborhood post-office. The two postal service employees there are doing the jobs that five did in the past. They barely have time to take a bathroom break or get out of the building for 15 minutes. Except to pick up the mail from the neighborhood drop boxes. Those drop boxes with the colors of the American flag are located every three blocks or so. Mail is delivered, almost always on time, six days a week. And the people who work for the US Postal Service are the kindest, most patient and most hardworking people you would ever hope to meet. UPS and FedEx employees come and go, almost interchangeably, but their stores are not precluded from selling all sorts of services. Why have their owners been allowed to lobby to cut services at my post office? Their prices are typically 2 or 3 times those of US Postal Service. Oh, perhaps that explains it. Instead of cutting services, allow post offices to sell standard financial services like money orders and cash checks. They are the All American choice and the best show in town.

    Jun 07, 2015
  • anon

    What an economic boon it would be to my low-income community to have low- or no-cost banking services provided at our local Post Office! Sometimes (even in this high-tech age) the old ways are the best ways.

    Jun 06, 2015
  • anon

    This is a win-win for both the post office and for low income citizens. Not to mention those in rural locations. These services should be offered in the P.O. as soon as possible.

    Jun 05, 2015
  • anon

    Yes, I believe the Post Office should offer non-mail services. Paycheck cashing should be the first and probably easiest. If you offered savings accounts in the past, then I don't see why you couldn't start doing so again. You could also provide an easy way for people to purchase government and savings bonds. I think the biggest hurdle would be getting approval to start these services, whether it's congressional or internal Postal Service approval. But these seem like good ideas, and you have a history of doing similar things in the past, so hopefully approval will actually not be that big of a hurdle.

    Jun 04, 2015
  • anon

    I live in rural Eastern Washington (state) and access to financial services can be difficult at times. Banks are few and far between. Having the option of having some financial services available at post offices would be greatly appreciated. Hopefully, this would also have the benefit of keeping those post offices that are slated for closing to remain open. Unless you have lived in this area, you really do not know the importance to a town to have a post office, it functions as so much more than a place to mail a letter. It literally becomes the hub of the community. it can be a meeting place, a source of local news and information, and a driving force in the local economy. Adding financial services would strengthen an office's role in each community it serves.

    Jun 02, 2015
  • anon

    I'm quite enthusiastic over USPO projected plans to expand the breadth and range of services. Citizens are looking to USGOV to give them services in retrn for their hard'earned taxed dollars. So many tax-payer dollars have slipped into the already overstuffed pockets of overpaid CEOs because they were considered too big to pay the price for their sins like tbe rest of us have to. Broader USPO Services are a way USGOV can soothe our ruffled patriotic Bald Eagle feathers!

    Jun 02, 2015
  • anon

    This is a great idea; hopefully USPS can also expand in other directions. The Post Office belongs to all of us. Let's keep it that way. Peace and Good, Jerry

    Jun 02, 2015
  • anon

    If there were a public, non-profit postal bank that could accept deposits and facilitate (electronically and hard copy) funds transfers, payments and other debits, I would immediately transfer my account there. On a national scale, it means that no matter where I moved, my bank could be my nearest postal branch of appropriate size to handle banking functions. I am on social security now, so why shouldn't my monthly benefit payment go easily from SSA to USPS bank--no need to involve the private banksters in the process. Perhaps I would be able to handle my taxes i n the same way. I TRUST the USPS in a way I will NEVER trust private banks. I encourage USPS to think in terms of facilitating the movement of all kinds of information in service to the public good.

    Jun 02, 2015
  • anon

    I am a retired federal employee. I strongly support the US Postal Service but I do not favor the post office offering so many ancillary services. Most lines already are so long at every post office you go to to mail a package, get stamps, or pick up mail. A typical transaction today at the counter takes twice or three times as long as it used to when the PO just sold stamps and excepted packages. Other services should be provided by a separate agency monitored by the government to make sure it doesn't rip off people like Amscot does. Mail services should remain with the federal government and there is no excuse why our PO can't be self supporting the way it was before making it a quasi-federal agency.

    Jun 02, 2015
  • anon

    I strongly support the expansion of the USPS into financial services as a viable business line that would offer expanded and valuable customer services, especially to sectors of American society that now lack low or no-cost mechanisms for fiscal transactions. The development of credit union-type savings and micro-loan programs are badly needed by the working poor as an alternative to predatory businesses that thrive from their misery. This expansion of services would be a great public service, consistent with the USPS mission. The proposed mission expansion has worked quite well around the world; if properly constructed and managed, it should do likewise here.

    Jun 02, 2015
  • anon

    Millions of US residents have no bank account and limited internet access. They frequently pay exorbitant fees for simple financial transactions. Implementing these proposals would help them greatly and provide the USPS with additional revenue.

    Jun 02, 2015

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