Why An Post will never make it big in financial services

What should have been a quick face-to-face transaction turned into quite the rigmarole

An Post has returned to profitability, helped by an increase in the price of stamps

An Post has returned to profitability, helped by an increase in the price of stamps

 

Over the past year or so An Post has run some slick television advertising highlighting the various services it offers under its An Post Money brand. Everything from insurance to credit cards and current accounts.

In a noble bid to diversify away from its declining postal business, the State-owned group is trying to persuade us that we can use An Post instead of a bank for our various financial services needs.

On paper it seems like a logical extension of its existing activities, dispensing various welfare products on behalf of the State and selling a range of Government investment products.

You might recall that it went down this path before, in a joint venture with BGL BNP Paribas before the 2008 crash. The partnership got whacked by the recession, recording a loss of €73.4 million in the 18 months to the end of June 2010, when it was effectively wound up.

Nearly a decade on and An Post is having another go on David McRedmond’s watch. Albeit on a more modest scale.

In its 2018 annual report, Debbie Byrne, managing director of An Post Retail, said its foreign exchange and current account services “achieved significant year-on-year growth”.

“Three significant new products were launched early 2019: An Post multi-currency card, credit cards and consumer loans. The launch of the An Post Money brand brings our financial services under one umbrella as we move forward to compete strongly in the financial services space,” she added.

Byrne is one of a number of young An Post executives at the heart of transitioning the business away from letters to ecommerce deliveries and other consumer-focused services, including financial products.

Some success

The company has had some success, with An Post returning to profitability, helped by an increase in the price of stamps.

But its venture into financial services will never take off in a sizeable way. Here’s why.

Last Saturday I went into a busy post office in south Dublin to purchase a multi-currency card loaded with Australian dollars as a gift for a relative who is travelling down under, having graduated from college. This can only be done in a post office branch.

To place the princely sum of Aus $154 (€100) on this card, I was told I would need two forms of identity, presumably for anti-money laundering purposes, although this was not specified.

Incidentally, the rate I was given didn’t match the one advertised on the wall of the post office. It was roughly a dollar out, but I chose not to contest it with the teller.

Having presented my passport and a utility bill, the nice woman behind the counter took them away to photocopy and gave me a form to fill out. I filled in the lines that were marked mandatory. The EU’s GDPR data privacy rules mean I’m less inclined to hand over more personal information than is necessary.

After a bit of time spent inputting this information into her screen, she handed me back the form and said I needed to add my phone number. This wasn’t marked mandatory, which I pointed out to her, but she said she needed it to progress on the screen. So I duly filled it in.

Jog on

At this point, a jolly man in tight running shorts and spectacles approached the counter next to me and asked how much sterling he could withdraw in one go. The assistant told him up to £500. Above that amount and he would need two forms of identification, which he most certainly couldn’t have had in his running togs.

So he got the maximum amount and asked when he could get some more. On Monday, came the reply, and he jogged on. It’s not clear why he wanted to stockpile so much sterling, but he was able to withdraw a multiple of my amount with no need for ID.

Meanwhile my assistant was struggling to get her barcode gun to scan my currency card. It took her quite a few goes, and she eventually had to wrestle it out of its holster. You get two cards, actually, a spare one in case the other gets lost. But they’re presented in rather unsightly envelopes, not really suitable as a present.

At this stage, my seven-month-old baby began to stir from her slumber and started crying. There’s nothing like a screaming baby in a small space to focus minds, and this seemed to help move things along to the point where I was formally presented with my receipt and cards, and was able to go on my way.

In total the transaction took 15 minutes. It might be the “ideal travel companion” but An Post won’t get rich selling four currency cards per hour. Especially as you can set up an account online with Revolut in minutes, giving you access to 150 currencies without having to set a foot outside your front door – as a number of people helpfully pointed out to me after the event.

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