Postal Service to unveil new electronic payment services

U.S. Postal Service officials will unveil three new enhancements to the agency's electronic bill payment service next week, in the process expanding its Internet presence and reopening a debate about the agency's role in the e-commerce marketplace. Launched in April 2000, eBill Pay allows consumers to make electronic payments to a variety of merchants. One of the new additions to the service to be announced next week is an electronic postmark. It allows consumers and businesses to see exactly when their e-bill or e-check was sent. The other two enhancements are much more controversial. Both push the agency farther down the e-commerce highway, an area where many critics argue the Postal Service has no business competing with the private sector. The first of these two controversial features, "Send Money," allows eBill Pay subscribers to send electronic checks to anyone, anywhere as long as they have a bank account. Currently, if recipients of e-checks are not set up to receive electronic transfers, they get paper checks. Send Money verifies recipients' identities, then allows them to enter bank account numbers to have the funds transferred electronically. The second controversial feature, "Pay@Delivery," combines Send Money, electronic postmark, Priority Mail and electronic collect with delivery verification. After making a purchase on eBay, for example, the buyer sends the seller an electronic check. The Postal Service holds the money in escrow until the merchandise arrives via Priority Mail with delivery confirmation. "I understood why they got into this arena," said Gene Del Polito, president of the Association of Postal Commerce. "They wanted to understand the market. Now, I don't see any reason for them to be in it at all. They have a service that is in competition with the private sector and it is not making any money." It is difficult to ascertain how much revenue the Postal Service gets from eBillPay. There are monthly fees and transactional fees, but Postal Service officials declined to reveal how many subscribers they have. Last September, the General Accounting Office reported that the agency does not have reliable financial data on its e-commerce initiatives. GAO is working on a follow-up study that is due out later this year. The agency does not release subscriber information for fear of revealing too much information to competitors, said Terry Carter, the Postal Service's associate vice president for financial services business development. "The service is still fairly young. Companies don't usually reveal a lot about subscribers until they are mature and established. But our numbers are growing. They grow every day," he said. The Postal Service is also under fire from private sector companies already involved in electronic bill payment. Jason Mahler, vice president and general counsel for the Computer & Communications Industry Association, a trade group representing Internet companies such as Yahoo! and Intuit, said the only reason that the Postal Service should intervene in electronic bill payment would be if there were an unmet need. He noted that most major banks and credit unions offer electronic bill payment. So do Yahoo!, Intuit and Microsoft and financial services companies such as Charles E. Schwab. Still, Carter said the service is merely an extension of the Postal Service's core mission. "Our core mission is delivering money, messages and merchandise. This is what we do every day," he said. "We view the Internet as another channel. It is where many of our customers choose to go. The further we enhance our services, the closer they get connected to the core."