Having recently attended the 10th Annual Southern African Postal Operators Association (SAPOA) Conference in Mauritius, Traderoot Africa CEO Louis Volschenk shares some insight into how national postal service operators in the region can utilise fintech to improve their services, offer new value-added service, and increase their revenues. In this blog post, Louis will explore how Traderoot’s Universal Issuing Platform – Core Account can be used by postal service operators in the Southern African region to offer profitable financial services to their customers.
Postal services in Southern Africa
In Southern Africa, postal services remain a key player in the economy, contributing significantly to social and economic development. However, over the past decade, the industry has been facing challenges such as declining mail volumes, increased competition from courier services and digital platforms, and a need to diversify revenue streams to remain competitive.
To address these challenges, postal service operators are increasingly looking to expand their service offerings beyond traditional postal services. One area of opportunity is through offering financial services, which have the potential to create new revenue streams, increase customer loyalty, and provide a valuable service to underserved communities. Postal service operators in Southern Africa however face several challenges when it comes to offering financial services to their customers. For one, they often lack the resources and infrastructure required to offer a diverse range of financial services. Additionally, postal service operators often have limited reach, making it difficult to provide cross-border payment services to customers.
Despite these challenges, postal service operators in Southern Africa do have a unique advantage when it comes to offering these financial services: they have a large customer base that trusts them. In many African countries, the postal service is seen as a reliable institution, one that people have used for years to send letters and parcels. This trust can be leveraged when offering financial services.
At the recent SAPOA conference in Mauritius, this desire to diversify became increasingly clear, but developing and deploying innovative fintech solutions remains a challenge due to the expense, time and lack of core fintech expertise.
“Traderoot’s Universal Issuing Platform – Core Account (UIP-Core Account) is a cost-effective fintech product that postal service operators can use to offer a variety of financial products and services to their customers,” says Volschenk. “The platform’s modular design allows postal service operators to tailor-make financial products that suit a variety of customer segments.”
The UIP-Core Account platform comprises various modules for digital banking, a universal issuing platform (UIP), a member profile management system (CIF), a rewards engine to drive customer relationship management, various regulatory reporting tools (BOP, AML, and CTF), and the Traderoot back-office. The platform supports open banking standards and is highly customisable, enabling postal service operators and other financial institutions to adapt to changing markets, offer tailor-made financial products, and create non-traditional revenue streams for their organisation.
Digital Channels/Virtual Branches
One of the challenges faced by postal service operators across Southern Africa is the lack of physical branches in remote areas. The Universal Issuing Platform – Core Account allows postal service operators to offer digital channels or virtual branches, providing customers with access to services and products through mobile phones or desktop computers. Postal service operators can offer customers the convenience of prepaid wallets or a card vault, enabling customers to store value and transact remotely with ease.
Postal service operators can use the platform to offer a range of financial products, including basic savings accounts and revolving credit accounts. The platform allows postal service operators to manage customer profiles and rewards programs, driving customer engagement and loyalty. Additionally, the platform provides regulatory reporting tools for compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
“By offering digital channels and virtual branches, postal service operators can expand their customer base beyond their physical locations and offer financial services to customers who may not have access to traditional banking services,” Volschenk explains. “This can be particularly valuable in rural areas, where postal service operators are often the only financial service providers.”
In addition to digital channels, the Universal Issuing Platform – Core Account allows the postal service operators to add traders or SMEs to a digital channel that creates a market to facilitate delivery. This can help postal service operators to diversify their revenue streams and increase their competitiveness in the e-commerce fulfilment space. With this feature, postal service operators can enable e-commerce for their customers, allowing them to buy and sell goods and services online. This feature creates a marketplace that enables the delivery of goods and services, making it easier for people to buy and sell online.
“This functionality is particularly important in rural areas,” Volschenk explains, “where access to goods and services may be limited. By enabling e-commerce services, postal service operators can play a crucial role in driving economic growth and development in these areas.”
Interoperable Domestic and Regional Cross-Border Remittance Services
Another area of opportunity for postal service operators is cross-border remittances. The Universal Issuing Platform – Core Account provides postal service operators with the ability to offer interoperable domestic and regional cross-border remittance services. This can be particularly valuable in Southern Africa, where cross-border remittances play a significant role in the economy.
With the Universal Issuing Platform – Core Account, postal service operators can offer customers a variety of store-of-value products, including credit cards, debit cards, prepaid cards, corporate or personal cards, travel or gift cards, loyalty and reward cards, and virtual cards and e-wallets. The platform also provides management of the customer information file (CIF) associated with the values it manages, and liquidity management, and supports a wide range of inputs and outputs from/to external parties like banks, card schemes, and postal service operators. Legacy systems.
Beyond offering this service to customers, the Universal Issuing Platform – Core Account can create the infrastructure to enable fast, efficient, secure, and cost-effective settlement between the region’s various postal service operators, especially given Traderoot Africa’s role as a certified Transactions Cleared on an Immediate Basis (TCIB) integrator.
“Almost daily, large sums of money are paid between the region’s various postal operators as payment for services rendered,” says Volschenk, “and our UIP-Core Account product is a perfect solution to streamline these transactions, speed up the settlement process, and reduce the transaction costs.”
Tailor-Made Core Account Products
The Universal Issuing Platform – Core Account is designed to help postal service operators tailor-make financial product ranges that suit a variety of customer segments and to do it in an efficient way that results in a profitable product for their business. With the ability to issue loyalty, discount, and reward cards, postal service operators can drive the behaviour they want with their customers and give them the best experience possible. The system provides full Know Your Customer (KYC) capabilities, which enables postal service operators to drive targeted marketing campaigns. With the ability to send customers notifications directly from the system, postal service operators can engage with them more effectively.
Postal service operators can use the Universal Issuing Platform – Core Account to offer value-added services such as prepaid airtime, electricity, and third-party vouchers. This enables postal service operators to offer their customers a comprehensive range of services, improving customer loyalty and engagement.
Adding these new products and services to their list of services offers several benefits to the regions’ postal operators These include:
Greater Control Over Fees
Postal service operators can set fees easily, providing customers with the best products while remaining profitable. The system allows for fixed fees, percentage thresholds, and subscription fees, or a combination of all three to maximise revenue.
The combination of new revenue streams, the ability to service a broader market, and the reduction in fees and other costs, enables postal service operators to increase their revenues and profits.
Regulatory Reporting Tools
The Universal Issuing Platform – Core Account also comes with regulatory reporting tools that help postal service operators comply with the relevant regulations. These tools include BOP, AML, and CTF reporting, which can help postal service operators ensure that their financial services are secure and compliant.
Customised and Personalised Services
The system provides full Know Your Customer (KYC) capabilities, which, aside from ensuring regulatory compliance, enables postal service operators to drive targeted marketing campaigns. With the ability to send customers personalised and contextualised notifications directly from the system, postal service operators can engage with them more effectively.
In conclusion, the Universal Issuing Platform – Core Account from Traderoot Technologies provides postal service operators in the Southern African region with a complete solution to offer profitable financial services to their customers through digital channels, virtual branches, and value-added services. It offers a flexible and easy-to-use system that can be tailored to customer segments, driving targeted marketing campaigns, and improving the customer experience.