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Discussion Starter · #1 ·
What are people's thoughts about Canada Post getting into banking? They only shut it down in the 1960s in Canada, and it's still being done in other countries, namely Japan.

Reason why I'm curious is that there are obviously underserved communities, and more recently, Scotiabank is pulling out of Grand Manan: https://www.cbc.ca/news/canada/new-brunswick/grand-manan-scotiabank-ferry-blacks-harbour-1.6539874

You can argue that you can do almost everything on-line/credit cards/debit, etc. The key is ALMOST. There's always going to be some edge cases where you want/need cash, and given the fact that postal offices are everywhere, it doesn't seem to have that much of an added burden. What will likely happen is that commercial banks will possibly pull out, leaving the postal banks around.

Personally, it sounds like a good idea, particularly when the government wants to target high banking fees. Having some bare bones account seems reasonable. Or, another option is to partner with Simplii/Tangerine or some other virtual bank to provide brick locations for ATMs/banking services to avoid re-inventing the wheel. Canada post is already partnering with TD for personal loans, so I don't see that big a stretch: Canada Post and TD enter strategic alliance to expand access to financial services for Canadians

For some other points supporting postal banking: Postal Banking
 

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one of the challenges is the handling of cash. It’s expensive to administer and ship. I don’t think the government would be unhappy if traditional cash use was minimized.
most retail outlets allow cash back at time of purchase. Traditional branch banking has been dying a slow death for about 10 years….and COVID has sped up the process.

funny, I remember in the early 2000s, TDCT extended hours in the former TD branches and introduced Sunday banking. since the re-opening after COVID, I’ve noticed a lot of Sunday closings and reduced hours. A generational change in a short period.

my last branch (at a major Toronto intersection) saw a reduction of around 40% in in-branch transactions between 2005-2015. That’s a huge number to respond to.
 

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What are people's thoughts about Canada Post getting into banking? They only shut it down in the 1960s in Canada, and it's still being done in other countries, namely Japan.

Reason why I'm curious is that there are obviously underserved communities, and more recently, Scotiabank is pulling out of Grand Manan: https://www.cbc.ca/news/canada/new-brunswick/grand-manan-scotiabank-ferry-blacks-harbour-1.6539874

You can argue that you can do almost everything on-line/credit cards/debit, etc. The key is ALMOST. There's always going to be some edge cases where you want/need cash, and given the fact that postal offices are everywhere, it doesn't seem to have that much of an added burden. What will likely happen is that commercial banks will possibly pull out, leaving the postal banks around.

Personally, it sounds like a good idea, particularly when the government wants to target high banking fees. Having some bare bones account seems reasonable. Or, another option is to partner with Simplii/Tangerine or some other virtual bank to provide brick locations for ATMs/banking services to avoid re-inventing the wheel. Canada post is already partnering with TD for personal loans, so I don't see that big a stretch: Canada Post and TD enter strategic alliance to expand access to financial services for Canadians

For some other points supporting postal banking: Postal Banking
... that's news from July 29, "2021" a year ago so it's after the facts. How is it going now as in year 2022?

Personally, I say it's not a bad idea/niche -first, providing a service for the under-serveds, particularly the rural areas, and 2. a potential to capture share in the (smaller) niche market(s).
 

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one of the challenges is the handling of cash. It’s expensive to administer and ship. I don’t think the government would be unhappy if traditional cash use was minimized.
most retail outlets allow cash back at time of purchase. Traditional branch banking has been dying a slow death for about 10 years….and COVID has sped up the process.

funny, I remember in the early 2000s, TDCT extended hours in the former TD branches and introduced Sunday banking. since the re-opening after COVID, I’ve noticed a lot of Sunday closings and reduced hours. A generational change in a short period.

my last branch (at a major Toronto intersection) saw a reduction of around 40% in in-branch transactions between 2005-2015. That’s a huge number to respond to.
... seems like the big banks only know which way to turn where a few pennies get saved. First, it was branches reduction 'cause there're the ATMs, everyone has gone to digital banking, etc. Then it's back to re-opening branches 'cause the corporates biggies don't know how to spend the profits overflows. Next Covid hits with traffic stagnating (meaning less suckers to pull into the banks for financial planning with their advisors) but the hot housing market keeps sustaining the annual multi-million bonuses (applicable to executives only of course, the minions get a few hundred extra). After that, as with year in year out, let's see which way the wind blows ... in the name of "innovation" (aka reinvent the wheel). At least that's the "trend" (in a nutshell) taking place in Toronto, Ontario, Canada I observed.
 

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Discussion Starter · #5 ·
one of the challenges is the handling of cash. It’s expensive to administer and ship. I don’t think the government would be unhappy if traditional cash use was minimized.
most retail outlets allow cash back at time of purchase.
In a place like Grand Manan, I doubt many retailers do cash back. Also, it's the small businesses that may suffer because a bit if they do things primarily through cash (remember, no credit fees nor debit fees when using cash). I can see the attraction of cash only businesses when it comes to mom and pop type stores. Cash still has its place in the world I find. I always carry some as it's convenient.

... that's news from July 29, "2021" a year ago so it's after the facts. How is it going now as in year 2022?
Seems to be going: MyMoney Loan | Canada Post

Personally, I say it's not a bad idea/niche -first, providing a service for the under-serveds, particularly the rural areas, and 2. a potential to capture share in the (smaller) niche market(s).
I find that most rural areas will have some post office nearby. Banks, not so much, so there's not really much in the way of competition. I imagine people manage right now, but as you two point out, corporate banks will adjust to needs and if there is an existing brick bank in a small town with declining business, it makes sense to close shop. After all, it is a business.
 

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What are people's thoughts about Canada Post getting into banking? They only shut it down in the 1960s in Canada, and it's still being done in other countries, namely Japan.
I think it's a good idea to improve accessibility.
I think it's a bad idea to expand into a losing business.

Reason why I'm curious is that there are obviously underserved communities, and more recently, Scotiabank is pulling out of Grand Manan: https://www.cbc.ca/news/canada/new-brunswick/grand-manan-scotiabank-ferry-blacks-harbour-1.6539874
So if Scotiabank knows that it isn't worth operating a branch, why would anyone build a branch there?
I think some sort of hybrid model might help, which is how many Canadapost "branches" work in such communities.
But there is a big difference between a convenience store clerk getting a package and providing financial services.

..and given the fact that postal offices are everywhere, it doesn't seem to have that much of an added burden.
I think it will be a HUGE burden and not work.
This is a money pit.

I don't want my tax dollars subsidizing this.
 

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It would be easy enough to have ATMs at isolated Canada Post outlets for those that need local cash, or to deposit cash. There is no need for Canada Post to be competing with bank and credit union brick and mortar locations.

The best solution is the one mentioned by the OP, i.e. partner up with one of the banks like Simplii or Tangerine, or even a regional CU* in those rural locations where there is no brick and mortar location, and provide deposit services. The problem is who is going to subsidize these operations. Canada Post is already bleeding red ink in all of its business lines except 'courier services'. The latter keeps the former from experiencing a total lobotomy.

* Even small town CUs have been rapidly consolidating to stay solvent/relevant. The smallest 120 credit unions out of a total of 220 in Canada have less than 5% of the total CU assets in Canada (not counting Quebec) and they are declining in numbers relatively quickly.
 

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Absolutely not. Canada Post has a mandate. Banking is not part of that mandate.

I see not reason why Canada Post should pick up non performing and money loosing retail bank locations. If they did, it would be the just the start. Every one horse town that did not support a profitable retail bank or credit union operation would be clamoring for one. Then it would become political. As would any retail bank fee or fee increase.

I would like to see Canada Post shrink some of their operations. Junk mail five days a week is hardly needed in my residential area. Twice a week/three times a week would be plenty. Do the commercial areas 5 days.
 

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I agree except for those CP locations where there is no other local retail banking/CU alternative. A deposit/ATM service could be partnered at such locations. The problem is who is going to pay for it. I don't actually think there are that many locations where there isn't already a retail banking outlet along with a CP outlet.

Even Fort Simpson and Norman Wells each has a CIBC branch and a CP outlet. No postal banking required.
 

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We use an ATM to get cash, our deposits are either direct of we e deposit cheques. Only time we go to the bank is to access the safe deposit box.
 

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To give this some factual substance..... For those advocating postal banking, can you name any Canada Post locations in Canada that don't already have some kind of brick and mortar banking/CU location, or at least 1-2 ATMs? Real life examples please.
 

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Discussion Starter · #12 · (Edited)
To give this some factual substance..... For those advocating postal banking, can you name any Canada Post locations in Canada that don't already have some kind of brick and mortar banking/CU location, or at least 1-2 ATMs? Real life examples please.
The CBC story that I linked at the start which is why I brought up the subject. Scotiabank is the only bank, and based on Google Maps, the only ATM. Since they're pulling out, that would be a location. According to Google Maps there are 3 Canada post locations around the island, so this would be an example. Just a quick scan on Google Maps can show some areas in Northern Quebec where that would be the case. Around Georgean Bay in Ontario... just taking a few likely places at random (small isolated areas). Traveling from Perry Sound to Sudbury along the 69 seems to show 1 ATM along the route, but at least 3 Canada Post offices. That's assuming that the ATM information is accurate.

Edit: An older study, and you may disagree with the source, but it does indicate that 45% of rural areas with post offices don't have bank branches: Why we need postal banking. I'll also point out that ATMs aren't always the answer. Lots of convenient store/gas station ATMs I've seen are withdraw only, and you can't deposit cash. Add to the fact that unless it is your bank ATM, you're likely to be charged some fee.
 

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The CBC story that I linked at the start which is why I brought up the subject. Scotiabank is the only bank, and based on Google Maps, the only ATM. Since they're pulling out, that would be a location. According to Google Maps there are 3 Canada post locations around the island, so this would be an example. Just a quick scan on Google Maps can show some areas in Northern Quebec where that would be the case. Around Georgean Bay in Ontario... just taking a few likely places at random (small isolated areas). Traveling from Perry Sound to Sudbury along the 69 seems to show 1 ATM along the route, but at least 3 Canada Post offices. That's assuming that the ATM information is accurate.

Edit: An older study, and you may disagree with the source, but it does indicate that 45% of rural areas with post offices don't have bank branches: Why we need postal banking. I'll also point out that ATMs aren't always the answer. Lots of convenient store/gas station ATMs I've seen are withdraw only, and you can't deposit cash. Add to the fact that unless it is your bank ATM, you're likely to be charged some fee.
Okay. A good example for why a fully equipped ATM should be provided on Grand Manan, but 3 CP locations in 656 sq km to serve 2400 people? I am speechless. No wonder CP is awash in red ink.

Truth of the matter is no one needs a CP outlet or an ATM or a banking outlet within 30km or so radius from their location. I know of an instance in AB where there is a CP outlet in each of 2 hamlets along a major highway probably no more than 12-15km apart, albeit they are all located in other businesses like they are in Shoppers Drug Mart. There are no "Google Map" ATMs that I know of, but there is retail banking less than 30km away in a larger town. It is hard to imagine anyone needing "banking" within distances that close together. Heck... I rode a school bus over 30km one way during my school years. It is not complicated.

Ultimately, it is not hard to develop workable ATM solutions for isolated areas like Grand Manan. Locate it in a drug store or supermarket. I most certainly would not trust Canada Post and its unionized workforce developing cost effective solutions.
 

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You can argue that you can do almost everything on-line/credit cards/debit, etc. The key is ALMOST.
With cash on the decline it no longer makes sense to add support for it. Sure you might come into the situation where cash is needed and it'll be an inconvience for a small percentage to get it but I don't see a money making business model to support that.
 

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With cash on the decline it no longer makes sense to add support for it. Sure you might come into the situation where cash is needed and it'll be an inconvience for a small percentage to get it but I don't see a money making business model to support that.
Cash is more likely to be used in some isolated places than more urban environments but the locals know that and plan ahead when they make that "weekly trip to town" like we did when I was young. Folks living in isolated locations cannot expect the conveniences of more urban locations. They are traveling for other services anyway.
 

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Discussion Starter · #17 ·
Ultimately, it is not hard to develop workable ATM solutions for isolated areas like Grand Manan. Locate it in a drug store or supermarket. I most certainly would not trust Canada Post and its unionized workforce developing cost effective solutions.
While it may do for some people, it still doesn't address the need for small businesses that deal with cash. Like I mentioned before there are some drawbacks (bank machine charges, not being able to deposit cash). Those convenience store ATMs are usually great for the odd time you need some cash, but I don't think they're normally set up for someone to deposit money.

With cash on the decline it no longer makes sense to add support for it. Sure you might come into the situation where cash is needed and it'll be an inconvience for a small percentage to get it but I don't see a money making business model to support that.
It probably depends on your location, which is why the focus would be on the rural areas. And ever since the Roger's outage, I think more people are going to consider carrying some cash for those emergencies.
 

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It probably depends on your location, which is why the focus would be on the rural areas. And ever since the Roger's outage, I think more people are going to consider carrying some cash for those emergencies.
I just don't see the business model for such a niche market. People should always carry some cash for emergencies situations or when going out to remote areas. For remote areas why not bring back the old credit card swiper machines?
 

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Nor do I see any potential for it either. There simply is not enough transactional business to make this cash flow positive, even if only implemented in the few Canada Post outlets where there is not a financial services alternative. Canada Post cannot do this as a charity. They are already bleeding red ink in a big way based on their financials for recent years. It is only the parcel (Purolator type) business that tries to carry the red ink on the other Canada Post business lines.

None the less, it seems they are trying to improve some rural operations if one looks at all commentary on their 2021 financial report. What they really need to do is to eliminate a whole bunch of their low volume outlets, decrease letter mail service to 3 days per week and reduce the amount of door-to-door delivery. They tried the latter pre-JT days only to have it politicized by the Liberals. CP has apparently already eaten into $1.5B of their $2.5B credit facility. They will be insolvent in the not too distant future if they cannot reduce services.
 

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In Australia when I was living there 99-03 one of the big national banks was Commonwealth Bank.
It partners with the post office so you can do your banking through local postal outlets in smaller places not served by bank branches.
In fact that bank might have once been the post office bank before it was privatized. Seemed to work well.
It was not my day to day bank, so I cannot speak on the details.
 
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