The United States Postal Service's woes are well-known and well discussed (see here and here). Indeed, the USPS' inability to allocate its resource contributed to its current inferior financial performance. To improve its competitive position, the USPS has proposed closing branches and ending Saturday service. Congress, which oversees the USPS and must approve its operation decisions, refused both proposals. Enter a new idea: banking.
Based on the USPS's white paper, branches would offer basic financial services including:
- Direct deposits
- Bill payments
- Mobile transactions
- Small loans
The service would target the roughly 25% of Americans (68 million) who operate partially or completely outside the financial mainstream. This target market could be reached by a USPS bank because, as Felix Salmon offers:
38% of post offices are in ZIP codes with zero bank branches, and so such a card would bring banking services to lots of people who have no easy access to them right now.
By adding financial functions at the USPS' roughly 31,000 stations (yes, the USPS operates more locations that Starbucks, McDonald's, 7-11 and UPS Stores combined), the USPS could keep the stations open, save jobs, and bring more Americans into the financial system.
Finally, this idea makes strategic sense as shown in the Ansoff matrix. The USPS would move into a new market with a new product with a projected addition of $8.9 million in profit. By engaging in a diversification approach, the USPS could move from inferior financial performance to superior financial performance.