Canadian Money Forum banner
1 - 6 of 6 Posts

·
Registered
Joined
·
2,943 Posts
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
 

·
Registered
Joined
·
2,943 Posts
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.
 

·
Registered
Joined
·
2,943 Posts
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.
 

·
Registered
Joined
·
2,943 Posts
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.
 

·
Registered
Joined
·
2,943 Posts
Discussion Starter · #22 ·
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?
Got it, so you and @AltaRed don't think it's worth the trouble. I don't think there's anything else to discuss then.

I'll just mention that if you're talking about those old carbon copy type credit card machines, I doubt you'll be able to find them around. The other thing is that it seems that credit cards are getting away from those embossed cards and just print the credit numbers on the back of the card. For example, the new Costco card.
Automotive lighting Grille Automotive tire Rectangle Grey
 

·
Registered
Joined
·
2,943 Posts
Discussion Starter · #25 ·
I personally can't come up with the business plan; however, here's an older report from CCPA (2013), which outlines some models that could be used, compared to some models used in other countries: https://policyalternatives.ca/sites/default/files/uploads/publications/National Office/2013/10/Why_Canada_Needs_PostalBanking.pdf.
Sure if you want to dismiss it out of hand because it's published by CCPA, as it has a left-wing bias, go ahead. But it's worth looking at. It may be old, but I doubt the situation has fundamentally changed, nor has bank access increased.

Edit: Also forgot this fun link about the banks telling the government not to consider it. Canada: banks want the post office to stay out of banking business. I'd say banks being against it (and the reason why postal banking shut down in the 1960s) should make one consider why that is.
 
1 - 6 of 6 Posts
Top