Going digital: keeping postal services as relevant as ever
by M’Hamed El Moussaoui, February 17, 2015
UPU, the UN’s agency for postal services, has joined the Better Than Cash Alliance.
With some 660,000 post offices worldwide, the global postal network is the largest physical network on the planet. Mostly found in rural and isolated areas, post offices have more potential than any other network to reach large swaths of the population.
Posts don’t just deliver mail. Globally, they offer financial services to 1.5 billion people, ranging from domestic and international remittances to insurance and credit. Of these, one billion people alone have a checking or savings account with the Post.
Among financial services provided by Posts, money transfers are a particularly important service. Making these more accessible and affordable is key to unlocking their full economic potential, which in developing countries is greater than direct foreign investment. And, according to a recent World Bank study, post offices offer the least expensive remittance services of all providers.
Since the advent of the Internet and new information and communication technologies, many Posts have faced the digital challenge head on and today offer a range of digital communication services that complement their core mail business, capture the opportunities of e-commerce and help digital financial services gain greater traction. These services respond to customers’ evolving needs, and their accessibility, affordability and traceability make the postal network as relevant in the 21th century as it has been in the past.
In terms of financial services, the Universal Postal Union (UPU) has been assisting Posts to move from cash to digital payments since 2000. In addition to expertise and technical assistance, the organization provides affordable technology so Posts can be part of its worldwide electronic postal payment network. As such, some 70 countries use the UPU’s International Financial System (IFS) software, which enables Posts to replace traditional money orders with electronic payments.
As part of the Better Than Cash Alliance, the UPU will work with leading members of this global network of governments, companies and international organizations to further accelerate the shift to digital payments. We will continue to urge Posts to embrace digital payment technologies and explore new business models, such as mobile financial services. Posts could provide these either directly, by partnering with mobile network operators or technology companies, or by being part of the mobile-money ecosystem, for example as cash-in/cash-out agents in rural areas.
Partnerships are central to reaching our goals. In recent years, we have stepped up our collaboration with several international organizations, including the International Fund for
Agricultural Development (IFAD), also a Better Than Cash Alliance member, the European Union, PlaNet Finance and the International Organization for Migration. By building on our capacities and common objectives, we have achieved concrete results in various part of the world. Together, for example, some 30,000 post offices in Africa, Asia and Central Asia have been connected to the UPU’s electronic financial network, making it possible for millions of additional people to send and receive digital payments through the post.
We are also equipping some 200 rural post offices in Burkina Faso, Cameroon, Côte d’Ivoire and Mali with tablets and smartphones. Using these, postal staff will be able to perform money transfers more effectively from rural locations, where access to electricity and connectivity can be challenging.
A lot remains to be done to boost financial inclusion, but we are making progress and lessons learned from these projects will be applied to others. As a global forum for dialogue and cooperation, the UPU hopes that its association with the Better Than Cash Alliance will enable it to leverage knowledge and best practices among a tremendous pool of experts, and continue shifting cash payments to electronic ones for the good of all society.
For more information about the UPU’s financial inclusion initiatives, please contact Nils Clotteau, UPU focal point for the Better Than Cash Alliance, at firstname.lastname@example.org.
About the Author
M’Hamed El Moussaoui
Chairmain, Financial Inclusion Group, Universal Postal Union (UPU)