Australia Post chief executive Christine Holgate said Australia Post had previously lost money on providing banking transaction services as banks close their own branches in regional and rural locations and instead direct customers to their local post office.
“This additional funding will enable us to invest in the post office network so that we can provide safe, reliable banking services, boost funding to our licensed post office partners and importantly continue to support communities across Australia,” she said.
Post offices process more than 376 million customer financial transactions every year, including $12.6 billion of bank transactions and $35 billion of bills being paid but Australia Post’s network of 4356 post offices cost $1.3 billion to operate and ran at a $130 million loss last year.
Many of Australia Post’s local post offices are operated by licensed post office partners, who Ms Holgate said as small businesses, do not have the capital investment needed either.
Disappointment with ANZ
ANZ customers will continue to have access to banking services at Australia Post for the next three months.
Australia Post says 6000 ANZ customers will be impacted but ANZ says there are only 900 small business customers nationally who use the service on a regular basis and do not have a branch within 20 kilometres of their local post office.
“While we are disappointed by Australia Post’s decision, there is currently no change for our customers using Australia Post to conduct basic banking transactions,” ANZ general manager of retail distribution network Paul Presland said.
Ms Holgate said she was disappointed ANZ had chosen not to commit to Australia Post’s request for support and said the bank’s current agreement will end in three months.
“We will offer ANZ a new contract to ensure their customers are still able to access the benefit of our services and they are not disadvantaged whilst ANZ continues to develop its own strategic options,” she said. “We have had a long and successful relationship with ANZ for many years… I remain hopeful that we will find a positive way forward together soon.”
Licensees doing the hard work
The new agreements also enable Australia Post to increase its Bank@Post base transaction payments to its licensed post office partners by approximately 50 per cent and increase the annual minimum payment to them by 25 per cent.
The national association for the 2,900 small businesses in the postal sector, Post Office Agents Association Limited, welcomed the funding boost and said the licensees “doing the hard work” for Australia Post and the banks deserve to be compensated more.
POAAL director Bob Chizzoniti said he looked forward to seeing the new funding flow through to the small business owners who operate Australia Post’s licensed post office network.
“As more bank branches close, especially in rural Australia, the extra funding should help maintain a viable banking service at licensed post offices,” he said. “We urge ANZ to join this initiative – especially as it continues to close bank branches.”
Cara is Fairfax Media’s small business editor based in Melbourne