Why postal banking?
There are a number of reasons to support postal banking. These include:
- many smaller communities don’t have banks but have postal services. It is a way to provide services to those communities and increase postal business
- Canada Post has a very large network of retail counters, it makes sense to use these counters to provide a wide array of services.
- first class mail volumes are slowly declining. Postal banking would help Canada Post’s bottom line
Would Canada Post run its own bank?
Around the world many post offices provide banking services. There are many variations on how this banking services are provided. Here are some examples:
- in Brazil, the post office has a partnership with a private sector bank
- In France the postal bank is a wholly owned subsidiary of the post office
- In Italy the post office is a financial intermediary for private sector banks
- in New Zealand Kiwi Bank is a wholly owned subsidiary of New Zealand Post
There are many different models.
The Universal Postal Union –an agency of the United Nations supports postal banking. The Universal Postal Union states “The provision of basic postal financial services contributes significantly to global economic and social development and plays an important role in improving living standards. According to a UPU study, postal operators provide some 1.5 billion people worldwide with access to basic financial services (payments, money transfers, savings).”
Postal Banks — are they profitable
Yes. Here are some examples:
- France’s Banque Postale has increased its profits every year since 2006
- India Post’s Financial Services has increased its remuneration for banking savings and savings certificates every year since 2006
- Italy’s BancoPosta has also increased its revenues every year since 2006
Do postal banks serve the under or unbanked?
In some countries postal banks have a mandate to provide services to the unbanked and under banked.
India Post provides services to those in rural areas, including those areas with a high concentration of poverty.
France’s Banque Postale provides micro loans to some financially vulnerable people.
A 2002-2006 Universal Postal Union Study of postal banking services in Brazil concluded that Banco Postal had a positive impact on access and use of banking for relatively low-income persons It also showed found that 50% of Banco Postal’s deposits were made by people living in the poorest municipalities.
What kind of services can be offered?
The list is endless. But it could include:
- general banking services
- bill paying services
- credit cards
- international remittances or transfers of money
and much more.
What about Canada Post?
In their great 2013 paper “Banking on a future for Posts? A financial assessment of postal banking and financial services at various postal administrations .”CUPW researchers Katherine Steinhoff and Geoff Bickerton said “There is a range of options or models Canada Post could consider. The corporation could set up its own bank or act as a financial intermediary by providing services in partnership with banking and financial institutions, including credit unions. It could work with one or a number of banks and these institutions could operate nationally or in different regions. As well, it could offer a broad or narrow range of financial services. CPC could also combine models.
Where can I find more information?
The best place to find information is the CUPW National web site.
Access to the paper “Banking on a future for Posts? A financial assessment of postal banking and financial services at various postal administrations” can be found there.