The Universal Postal Union (UPU) is rolling out digital financial services projects reaching as many as 800,000 people and businesses across Africa, Asia and the Pacific under its Financial Inclusion Technical Assistance Facility (FITAF) in 2019 but Americans are still denied a public banking solution that serves the public, instead of Wall Street.
UPU is a worldwide network with 192 member countries fostering cooperation among international postal agencies and part of the United Nations.
The effort is part of a plan to increase the number of postal bank accounts by 250 million by 2020 and support the launch of digital projects at facilities close to places where many people now lack access to financial services.
“Postal Banking is simply the provision of low-cost, consumer-driven financial services through an existing service provider that has reach into local communities,” said Lisa McCormick, who said the option is a good way to reduce economic inequality.
“Postal banking services could include check cashing, bill payment, savings accounts or even small-dollar loans that will benefit consumers who either do not have access to traditional banks or would prefer a public option,” said McCormick. “Every other developed country in the world has postal banking and extending it to Africa begs the questions why we do not have such services in the United States.”
“The US Postal Service is one of the most trusted institutions in America, and tens of millions of seniors could benefit if we were to offer consumer financial services, like paycheck cashing, no-fee ATMs and electronic funds transfer through its 30,000 local branches,” said McCormick, who noted that 59 percent of post offices are in areas that are under-served by traditional banks.
UPU Director General Bishar A. Hussein announced that the Posts of Benin, Côte d’Ivoire, Ghana, Kiribati, Nauru, Pakistan, Rwanda, Tonga and Viet Nam would be the first to benefit from the program, which focuses on advancing financial inclusion and the digitization of postal services.
Speaking at a panel session titled “Boosting financial inclusion through mobile money” in Nairobi, Hussein said the UPU was “acting concretely to develop digital finance through the Post on the ground to the benefits of the underserved populations and businesses.”
“We are building partnerships with international donors and the private sector to support the Posts in their digital journey,” added the Director General.
According to the World Bank, 1.7 billion adults still lack access to formal financial services. One billion of those excluded are women.
With more than 670,000 outlets reaching some of the world’s remotest areas, postal service outlets are a perfect partner for expanding financial inclusion.
FITAF helps Posts build capacity to offer the digital financial services that can reach anyone, anywhere, anytime, giving citizens a safe place to keep their money and enabling small businesses to access the financing they need to grow and contribute to the economy.
The program also contributes to the 2030 Agenda for Sustainable Development by leveraging the Post’s role as a public services provider.
The projects announced will help four postal operators set up mobile financial solutions for payments, savings and insurance services, and five others to understand and explore the opportunities in digital finance.
Through FITAF, the UPU aims to implement 20 innovative digital postal financial services projects by the end of 2020.
Gov. Phil Murphy’s proposal to establish a public bank in New Jersey to expand access to capital at competitive rates for socially beneficial and creditworthy projects has languished without attention since it was introduced in January 2018.
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