June 3, 2019 – RARC-WP-19-005
- The Postal Service has authorized a small set of private “PC Postage providers” to offer printed postage to customers, accessible from their home or business computers. PC Postage accounted for about $6 billion in revenue for the Postal Service in Fiscal Year 2018.
- PC Postage’s growing importance as a revenue stream has drawn scrutiny to the Postal Service’s complex and sometimes problematic relationship with the providers.
The Postal Service began allowing a few private companies to sell printed postage in the late 1990s. Over the ensuing 20 years, PC Postage grew from a niche business serving mostly small mailers to an established one serving mostly large package shippers. The number of providers did not grow, however. Today, there are only four. The two largest merged in 2015 when Stamps.com bought Endicia. The Postal Service has not accepted any new applicants for over a year, due to what it says is a review of its onboarding procedures. The Postal Service also has three proprietary solutions, with no usage fees, for electronic postage.
In this white paper, the OIG explored various aspects of the Postal Service’s business relationship with PC Postage providers. It made five recommendations to remedy the problem areas that it found.