The U.S. Postal Service it is currently testing a new paycheck-cashing service in several East Coast locations, in an effort to provide underserved areas with an alternative to traditional check cashing. The USPS said it will not disburse any cash. Instead, those using the service can use their payroll and business checks to purchase single-use gift cards of up to $500. Checks larger than $500 will not be accepted.
The pilot program began on Sept. 13 at retail post offices in the areas of Washington, D.C.; Falls Church, Va.; Baltimore; and The Bronx, New York. “This pilot, which is in collaboration with the American Postal Workers Union (APWU), is an example of how the Postal Service is leveraging its vast retail footprint and resources to innovate,” the USPS said in a statement emailed to MarketWatch. “Offering new products and services that are affordable, convenient and secure aligns with the Postal Service’s ‘Delivering for America‘ 10-year plan to achieve financial sustainability and service excellence.” The test of a new potential money-making service comes as the USPS implemented this month some changes that will make sending certain pieces of mail slower, as it looks to save money by using its cheaper ground transportation network rather than more costly air transportation. Also read: U.S. Postal Service looking to hire more than 40,000 employees for the holidays. The USPS’s pilot program isn’t an entirely new concept, as postal services in some other countries, such as Germany and Japan, have used their postal network to provide banking services in underserved areas.