This may be the most innovative idea we’ve heard related to the U.S. Postal Service since Benjamin Franklin was its first Postmaster General.
Fox Business reports JPMorgan Chase is in talks with the U.S. Postal Service to begin offering banking services through USPS locations. That would include cross-training U.S. postal workers as bank workers.
Importantly, the talks include providing secure indoor ATMs at USPS locations.
U.S. retail banking has experienced major declines in locations as many consumers shift toward online and mobile banking. So this would be a welcome next step in the Trump administration’s ongoing “public-private partnership” model.
It worked well the first half of this year when the government formed partnerships with U.S. retailers, manufacturers, and food processors. This ensured American store shelves stayed stocked and essential businesses had the resources they needed to weather the COVID-19 disruptions.
Public-private partnerships also ensured U.S. hospitals had an oversupply of ventilators and a plentiful supply of antibiotics.
Even though it’s a myth that the Constitution requires a U.S. Postal Service (it doesn’t – the Constitution just authorizes Congress to create one), the postal service model isn’t going away anytime soon.
The U.S. Postal Service does, at this point, still fulfill a spate of vital public services (and no, filling your mailbox with junk mail isn’t one of them). That includes last-mile delivery for over 78,000,000 noncommercial pieces of mail each day at costs that would put FedEx and UPS out of business.
On top of that, the USPS provides for low-cost delivery addresses (P.O. boxes) for those who don’t have deliverable postal route addresses – over 9 million Americans. It also offers low-cost access to money orders and other services, such as passport photos and notarizations, at nonprofit costs to the public.
That said, operationally, running and maintaining the infrastructure of each postal building, mailbox, and truck has huge overhead costs. As both advertising and banking increase their digital footprints and modes of operation, fewer and fewer people need the post office’s services. That leaves it short of revenues necessary to cover the low-cost services that especially lower-income Americans rely on.
Similarly, U.S. retail banking has seen massive consolidation, with hundreds of bank branch locations closed across the U.S. in recent years. Consumers, particularly millennials, just don’t have the same need to physically enter a bank location as people did in the past.
In fact, a recent survey of millennial bank-account holders found that over 75% said they haven’t been inside a bank for over a year.
This is what makes the marriage between U.S. banking and the U.S. Postal Service such a nifty idea. While the individual services a postal branch or a physical bank offers, by themselves, may not be enough to profitably keep them, offering the combined services at a single location flips that script.
Now a customer can check their mail, send certified mail, register to vote, and apply for a car loan, all in about a 30-minute visit. And with more than 50 million adult Americans still counting themselves in the ranks of the “underbanked,” this should mean more Americans can join the U.S. banking system and, ultimately, participate more fully in the U.S. economy.
Furthermore, some of the profits from banking would provide much-needed revenues to the USPS, without having to raise taxes. Profit-sharing with a government agency instead of new taxes – who’d have thought such a thing even possible?
Of course, the final details need to be worked out. And there will be plenty of opportunities for the USPS to mess it all up. But we heartily applaud the idea of breaking down the purely traditional barrier between government services and private businesses.
As the marriage between SpaceX and NASA has demonstrated so successfully over the past three years, partnerships between government agencies and private businesses can end up being mutually beneficial, as well as a boon for consumers.