Page 291 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Under this model, the involvement of the postal operator is relatively limited and the role of the Post
is mostly to manage liquidity in its network and to ensure that its points of contact are all online, to
communicate in real-time with the system of the MTO or the bank.
• Cash-merchant for a mobile financial services provider:
• DPOs from 23 countries or territories have signed agreements with banks (case of 5 Posts), FinTechs
(5 posts) or mobile network operators – MNOs – (13 posts) to provide cash-in / cash-out services for
the provision of various mobile-enabled services. As for the cash-merchant model with MTOs, the
role of the Post is mainly to ensure that liquidity is available throughout its network.
For the bank, FinTech or MNO partner, the interest of signing up a postal operator as an agent is to have access
at once to a large number of agents covering all the national territory, often with good cash availability. Given
the experience of various postal operators in managing a network of agents for their own postal services
(financial or not), Posts could act as super-agents/master agents but this has not been observed so far for
mobile financial services.
For the Post, however, this model has some limitations. First of all, the fees are relatively low compared to
the costs of ensuring liquidity availability throughout its network. Also, most postal operators offer their own
electronic postal money orders, which means that mobile products often come as competitors to their own
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products and could potentially cannibalize these.
Lastly, it should be mentioned that barring exceptional circumstances (see case of Brazil below), Posts should
avoid entering into exclusivity agreements with partners. Indeed such arrangements can considerably impede
competition, increase the cost of services, and prevent full exploitation of the potential network of postal
access points. This is particularly important for remote and marginalized areas to avoid that only one financial
service or remittance service provider be available to that population.

4.2 BM3: Partnership

Partnership model with one or several banks:

39 posts worldwide have concluded partnerships with financial institutions under which the postal branches
are used to offer banking services. The partnership can be exclusive, as is the case in Brazil, or non-exclusive
with Australia and the UK being good illustrations of current trends.

• In Brazil, back in the early 2000’s, a project was launched to use the post offices as agents for banks. The
initial idea was to have various banks provide their services through the post. Separate tender processes
were organized in 2002 for different regions of the country and the same bank, Bradesco, won them all.
An exclusive partnership was therefore set up between Correios and the private bank at the national
level. Under the contract, postal branches acted as banking correspondents, offering all the services of
the bank by accessing Bradesco’s information system in real time. Banco Postal, as it was called, was not
a real bank but rather the commercial name under which the operation was functioning. In 2006, after 4
years of operation, Banco Postal was live in all 5500 municipalities of Brazil, bringing banking services to
regions where they had previously been completely absent. In 10 years, the Post had opened 10 million
accounts on behalf of Bradesco. However, in 2012, for legal reasons, a new tender was organized to renew
the agreement and unexpectedly, a new partner, Banco do Brasil, presented the highest bids. Banco
Postal was therefore re-launched in 2013 as a new alliance, and 4 million new accounts have opened in
the last 3 years.

• Australia Post has a total of 4,406 branches, with 3,577 of these offering financial services (the remaining
branches are mainly community postal agencies which only sell stamps and collect and distribute mail).
Australia Post set up Bank@Post, a service which enables clients of 70+ financial institutions in the country
to make deposits and withdrawals, pay bills, or check their balance. Virtually all banks in the country have

5 Electronic postal money orders are basically money transfers that are exchanged between Posts. They can be provided under
various forms: cash-to-cash, cash-to-account, account-to-cash, or account-to account.

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