The United States Postal Service may expand its financial servicesbeyond money orders and remittances.

“More than a quarter of Americans live partially or completelywithout access to mainstream financial services and are oftenforced to rely on costly services like payday loans or checkcashing to cover their everyday expenses,” the USPS said on itswebsite, introducing a white paper released Monday by its Office ofInspector General.

The USPS is financially motivated to offer more financialservices, saying in the white paper that if it captured just 10% ofthe current unbanked and underbanked market, it could result in$8.9 billion in new revenue each year.

Possible financial services, according to the paper, couldinclude reloadable prepaid cards, mobile transactions and productsthat help the underserved take part in e-commerce. They also couldinclude new ways of transferring money both domestically andinternationally, and perhaps even include small loans that wouldhelp customers overcome unexpected expenses, the report said.

The paper was especially bullish on payment services, becausethey have the lowest barriers to entry for the USPS, because theyare the most similar to what it already offers. Payment servicesalso generally do not require a major capital investment, and arefull of opportunities to partner with banks, the report said.

One possible cornerstone product identified by the report was aPostal Service branded open-loop reloadable prepaid card.

“With the development of highly secure identity verificationsystems and partnerships with government at the local, state, andfederal levels, the cards also could send or receive tax paymentsand refunds, as well as handle other government-to-citizen orcitizen-to-government payments,” the report said.

“Such a product would not only help reduce the government costsassociated with cash and check payments, it also would help fulfillthe goal of bringing the underserved into the mainstream financialfold. The funds on Postal Cards could be covered by the FDICinsurance of a partner bank,” the report added.

The report also suggested offering payday loans that charge a$25 application fee and 25% APR.

Eric Richard, executive vice president of regulatory affairs atCUNA, said credit unions would be open to partnering with theUSPS.

“My sense is that credit unions would have happy to explorepossible creative partnerships with the Post Service or anyone elsewho can help bring financial services to more people at less cost.But to the extent that the goal here is more profit for USPS, therecould be some problems,” he said.

“The field of financial services is already extremely crowdedand competitive, and credit unions already provide a cooperative,not-for-profit alternative that benefits consumers, including manywho would otherwise be unbanked. This is not an area in which thereis a lot of low-hanging fruit that others have not picked,” headded.

The move could also help the post office remain relevant in anemail world.

“As society becomes increasingly cashless, the Postal Service'sability to provide a physical link to the new digital economy willbecome more and more vital,” the report said.

The USPS stressed it doesn't wish to compete with banks orcredit unions, saying it could partner with existing financialinstitutions for some products. The report also said the postoffice's target market is not actively pursued by financialinstitutions.