USPS Falling Behind Transit Agencies in Providing Banking Services

septa-bus-go-philliesSoutheastern Pennsylvania Transportation Authority (SEPTA) is about to introduce a new branded payment card that will allow transit riders to have paychecks directly deposited to the transit card.   The cards will be comparable to any other debit card and will have the ability to pay bills on-line, make payments at merchants in addition to pay transit fares.

The SEPTA branded debit card is designed to serve un-banked and under-banked in Southeastern Pennsylvania, many of whom are regular transit riders.   The card will compete with similar cards offered by Walmart, eBay’s Paypal, and Greendot.    If SEPTA’s branded debit cards are a success, one would expect that other transit agencies that use scanned cards to collect transit fares to offer branded debit cards as either an alternative to or a replacement of current swipe cards.

The product that SEPTA will be offering is one of the financial services that many Postal administrations offer outside of the United States.  Unfortunately, under current law it would be difficult for the Postal Service to offer a similar product as it would be a new “non-postal” product.  Given the challenge the Postal Service has to generate sufficient revenue, maybe its time to remove restrictions that would prevent the Postal Service from offering a branded debit card and other financial services for the un-banked or under-banked.

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