UPU News : Posts ready to exploit demand for financial services

11.04.2014 - To capture the potential for growing the market for postal financial services, Posts must be open, forward-looking and innovative.

 Postal financial services could throw a lifeline to socio-economic development (Photo: Khalfan Said/keystone/EPA, Arusha, Tanzania)

“While postal financial services have been around for more than a century, they can still provide a large revenue stream for Posts,” said UPU Director General Bishar A. Hussein at a recent UPU forum organized prior to the Postal Operations Council in April.

He called on public postal operators to boost their bottom line through a business area that also brings many social benefits. “Postal financial services can facilitate national economic growth and financial inclusion, as well alleviate poverty and provide a lifeline to many migrants,” he said.

Pedro de Vasconcelos from the International Fund for Agricultural Development reminded attendees that the global remittance market was worth some 430 billion USD in 2013. “In the next five years, 2.5 trillion USD will go to countries in remittances… of which the rural share is 1 trillion USD,” he said.

“The postal operators’ market share might be small as there are a lot of players but there are still huge opportunities to be had,” said de Vasconceles.

Private view

An insight into the private sector’s take on remittances from migrants came from the International Association of Money Transfer Networks, a trade body. Its chair, Mohit Davar, said there was a huge market for remittances, driven purely by migrants.

“There are 220 million migrants living and working overseas,” said Davar. “However, informal remittances account for about 40 per cent of volumes.”

Davar called for more harmonized regulation of the money-transfer market, as without this: “We will end up pushing flows into informal market and [no player in the market] wants that.”

Posts speak

The Kenyan Post shared its innovative approach to financial services. On the one hand, it handles government payment services. On the other, it is an agent for five commercial banks. “There was customer demand for this because of difficulties in sending and receiving money,” said Enock Kinara, its CEO.

Alfred Mabika Mouyama from Poste Gabon emphasized that public postal operators could rise to the challenge. “The post office is able to provide financial services, it can develop partnerships both internationally and nationally and it can listen to regulators, while supporting our governments to bring their services to the population,” he said.

Summarizing discussions held during the forum, UPU Deputy Director General Pascal Clivaz said: “At the UPU level, we invite our member countries to renew the legislative framework and be open to partnerships, allowing the public postal sector to be major players in new financial services, including those involving mobile phones.”

Source :  http://news.upu.int