Postal dept. slashes instant money order tariffs

Every month, M. Devika makes a trip to the post office in her locality, to send money orders to her daughter in Coimbatore, who is an engineering student there. She is one of an increasingly small number of people who use the postal service for money transactions, with banking operations relentlessly moving online.

Money orders, once routinely used to send money from one city to another, and still the mainstay in villages across the country, are finding fewer takers of late, say postal department officials.

In a bid to retain existing customers and encourage more people to use the service, the postal department has recently slashed its tariffs by half. Also, under an instant money order service, customers can receive money sent through online transfers within a few minutes, irrespective where they are in the country. The sender is given a 16-digit secret code, and she gives this to the receiver who can pick up the money at her nearest post office by producing the code and a form of identification. This service, is a variation of the original, where the recipient gets the money when the local postman delivers it.

Earlier, the tariff for amounts to send between Rs. 1,000 and Rs. 5,000 was Rs. 150 and nearly Rs. 20 was added to send every additional Rs. 5,000. A customer sending Rs. 50,000 by money order, would have to pay Rs. 330 as postal tariff.

Now, the tariff ranges between Rs. 100 for remitting Rs. 1,000-Rs. 10,000, Rs. 110 for Rs.10, 0001 to Rs. 30,000 and Rs. 120 for Rs. 30,001to Rs. 50,000.

The highest tariff has been reduced from Rs. 330 to Rs. 120, and this, officials hope, will lure more customers into using the service.

But the instant money order service is still not very popular. In one of the city’s postal division, only around 30 instant money orders (IMOs are booked every month, bringing in monthly revenue of Rs. 1.5 lakh.

But the same division distributes 65,000 electronic money orders (EMOs) ) — the conventional service — every month, and revenue of Rs. 6 crore is generated, sources said. A sizeable number is distributed to pensioners of government schemes. Migrant labourers too, largely use the facility, an official said.

Though EMOs reach the customers a day later, they are preferred to the instant money orders, as they are delivered at the recipient’s doorstep. However, a few like Ms. Devika, prefer IMOs. Ms. Devika said: “My daughter finds it easier to visit a post office nearby as she receives the money in minutes.”

Officials of the postal department said they expect the number of money transactions to go up this festive season.

The service is offered in 514 post offices in the Chennai city region, including Puducherry. Of these, nearly 50 per cent fall within the city and its suburbs.

“We are expecting the number of transactions to go up by 25 per cent as the tariff has been reduced. We are also targeting business owners and encouraging them to use the service,” said an official. 

Source : The Hindu, 10 Jan, 2013