Australia Post said it has signed a five-year deal with the Commonwealth Bank of Australia (CBA) and multi-year pacts with two other Australian banks, Westpac and NAB, under which the banks will support critical investment in Australia Post's Bank@Post service.
Another Australian bank, ANZ Bank has decided not to commit to the new arrangement prompting Australian Post to inform the bank that their current agreement for Bank@Post services with Australia
Post will end in three months. ANZ will be offered a new contract which will have a different Community Representation Fee to be paid annually, coupled with revised transaction costs.
Securing countrywide financial service network
The agreements with CBA, Westpac and NAB include a new Community Representation Fee of A$22 million per annum, as well as revised transaction fees that will enable critical investment in the Post Office network. Together, the decision of these three banks means Australia Post has secured hundreds of millions of dollars of additional funding required for Post Offices in the years to come.
Without support, Australia Post risked either suspending the service or closing some community Post Offices, which would have hurt communities and cost jobs.
Currently, Australia Post loses money operating the service and does not have the funds to subsidise this service further or make the critical investment needed. Many of Australia Post's local Post Offices are operated by Licensed Post Office partners, who as small businesses, do not have the capital investment needed.
There are some 1550 communities across Australia, predominantly in rural and regional Australia, which today have no bank branch. The citizens and small businesses of these communities depend on Australia Post to provide access to financial services through the Bank@Post service in their local Post Office.
Largest investment ever
In a statement, Australia Post's Group Chief Executive Officer and Managing Director Christine Holgate said the investments "will not only help save a critical service in Post Offices serving the communities of Australia, it saves jobs and supports the financial viability of our local Post Office partners."
"These agreements ensure customers will be able to access withdrawal, deposit, balance enquiries and passbook services at more than 3500 Post Offices across the country. Mrs Holgate added that "these agreements will allow Australia Post to increase Bank@Post base transaction payments to our Post Office licensees by approximately 50% from January 1st 2019, as well as investing in infrastructure including technology and security upgrades, and local marketing. Additionally, we will increase the annual minimum payment to licensees by 25%.
Last August, Australia Post posted a 41% jump in full-year profit to A$134 million as continued growth of the parcel delivery unit helped offset declines in its domestic letters business.
Nol van Fenema