USPS pilots a public banking program | Hacker News Reader

USPS pilots a public banking program

marketplace.org

38 pointsxojoc23 comments

Tremendous news. With the USPS’ reach and government banking, they’re strategically positioned to provide banking services to the unbanked and underbanked, especially in more rural areas that aren’t profitable enough for banks or credit unions to maintain outposts. While the gift cards offered as a value store are suboptimal, there is a path to deposit accounts (and instant payments are around the corner).

Progress!

Can you give me an example of one community in the entire US with a postal service but not a bank?

Not to mention neobanks. All you need is a $100 smartphone for that.

https://www.fastcompany.com/90683033/the-post-office-is-fina...

“According to a 2019 report by the Federal Reserve, 22% of American adults, or 63 million, are either “unbanked” or “underbanked,” meaning they don’t have easy access to a financial institution to do things like cash checks or save money.”

“At the same time, millions of people who live in “bank deserts” are in need of banking access. Post offices seem like an apt solution: 59% of them are in zip codes that have no banks at all.”

And smartphones as a requirement for neobanks or online only banks is an equity issue. Not everyone can afford a smartphone, even one as inexpensive as $100. A debit card can be issued for a few dollars, and postal workers are already working the retail counter.

And these are places that have Post Offices?

Correct. There are 31k US post offices across the US, so roughly 18,300 post offices where there are no banks. Makes sense to extend some operating procedures and point of sale systems to offer banking services at that scale.

And in some places in WV, not even talking about edge, even getting phone signal is hard (i'm not complaining, great place to take some vacations). I'd be surprised if even 1/5 of people in those remote communities have internet with their phone.

"A banking deserts are geographic areas where no banks exist within a 10 miles radius".

I don't think that means dont have access so banks. I live in an area 10 miles away from the nearest bank or office and I'm in a suburb.

10 mile away sounds terrible when you don’t have a car and public transportation is inadequate.

There are certainly at least a thousand, and that’s probably a laughably low estimate. I can think of 10 right off the top of my head but you’ve never heard of them. I currently live in McDaniels, KY and it’s one. My bank is a 1 hour drive one way. I would bet money that there are over 200 in Kentucky alone.

Startup, WA

Gold Bar, WA

Skykomish, WA

At least from Apple Maps, they’ve all got a USPS but no bank.

Someone who knows the Sunday traffic on Highway 2, I assume.

> Not to mention neobanks. All you need is a $100 smartphone for that.

...and the time and sophistication to know about "neobanks," choose one, and sign up.

Chime has 13.1 million accounts.

Chime, like (Bank)Simple, could disappear at any time, hence the enormous value in durable public goods sponsored by the government (USPS, postal banking, etc).

>> ...and the time and sophistication to know about "neobanks," choose one, and sign up.

> Chime has 13.1 million accounts.

That kind of proves my point. There are more than 300 million people in the US, and they've only reached 4%. Hardly the kind of thing that will solve the problem for less sophisticated people.

Also, the problem of unbanked/underbanked people exists despite them, so that's another clue that they're not the solution.

What if you need to pull out more than a few hundred bucks at a time? ATMs have serious limits.

Dansville, Michigan

Many villages in Bush Alaska. Often the local store (in places that are large enough to have a store) will be sort of "deputized" as a post office, but there's rarely a bank.

they do this in Japan, and in Europe also!

Other articles* mention fees: $5.95 to cash checks up to $500. That's more than my local-chain grocery store's service counter.

* https://prospect.org/economy/usps-begins-postal-banking-pilo...

So they’re trying to kill it before it even gets off the ground.

If you're not a customer of a bank and you come to cash a check (that isn't drawn on that bank) then you are going to pay a fee (if they will even cash it). I assume check cashing businesses charge a similar fee.

It would be great in principle if the USPS could cash checks for free, but they are also taking on the risk of the check being bad.

Extremely early days -- the pilot runs at four post offices (one in each of the four cities), and AFAICT it converts a single check into a single prepaid debit card (no reloading, yet).

Hopefully it reduces some of the need for check cashing places and the like, but definitely a ways out from serving historically under-banked communities.

Reply on news.ycombinator.com