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.