George Graves-Sampson delivers mail in Toronto the old-fashioned way, but with the revamped ePost service, Canada Post is now chasing digital business.Matthew Sherwood for The Globe and Mail
Canada Post is betting its future on a world where consumers do everything online they once did through the mail.
The federal Crown corporation is poised to roll out a revamped and expanded ePost – the 10-year-old online bill consolidation portal – over the next 18 months, anchored by a multimillion-dollar investment in virtual identification and encryption technology. The new service goes live next week in the Waterloo region of Ontario.
The organization is betting the new technology will win over previously reticent governments, while its trusted corporate name lures millions of consumers.
Even more important, Canada Post is counting on ePost to be the future of a company whose main business – letters – is in a steady and inexorable decline. The massive bet comes on the heels of a dismal quarter for Canada Post, which this week reported a $253-million pretax loss for 2011 – its first in 16 years.
Letters account for more than half of Canada Post's business, but every year Canadians are getting fewer of them (20-per-cent fewer per address since 2006).
Canada Post chief executive officer Deepak Chopra foresees a future in which consumers receive and pay their bills, get their paycheques, renew drivers' licences, pay parking tickets, buy magazines and receive personalized ad pitches – all online, through ePost.
Convinced of his vision, Mr. Chopra split Canada Post into distinct digital and conventional units after becoming CEO last year. And he installed Kerry Munro, a Silicon Valley-trained former head of Yahoo Canada as the "digital delivery network's" first president.
"We want to build the digital franchise," Mr. Munro said in an interview. "Really, it's the future of Canada Post. … It's now the anchor of our consumer franchise."
Over the years, Canada Post has invested $100-million in the service, which has 7.5 million subscribers. Mr. Munro said users, revenue and transactions are all growing 20 per cent to 30 per cent a year. He won't disclose current revenue, which is generated by charging service providers (utilities, cable companies, governments and the like) transaction fees when consumers use ePost.
Getting a critical mass of Canadians to embrace ePost is the key to making Mr. Chopra's ambitious e-vision a reality. While 7.5 million people subscribe to ePost, only 2.5 million of them use it regularly. And it's well shy of the 15 million addresses that get mail.
"They have to find revenues on the electronic side to maintain a presence in the communications market, while generating the revenue needed to maintain the physical network," pointed out Robert Campbell, president of Mount Allison University in Sackville, N.B., and chairman of a 2008 federal advisory committee on the post office.
Canada Post isn't alone in chasing the market. Symcor Inc., jointly owned by Bank of Montreal, Royal Bank of Canada and Toronto-Dominion Bank., is a major player in transaction processing. In the United States, there's Zumbox Inc. and Pitney Bowes' Volly, which do billing consolidation.
And there's the chronic problem of consumer resistance. Why, for example, would people route their transactions through ePost when they can use their banks' websites to pay bills?
The answer, according to Mr. Munro, lies in security and convenience. The revamped ePost offers a means of authenticating individuals and linking them to their physical addresses. That's crucial for governments if they're going to let people renew licences, obtain health cards and access other services on ePost.
"They want a trusted source that will maintain the integrity that is government," Mr. Munro explained. "In many ways, Canada Post is equated with government."
Getting enough government providers to sign up is a "long journey," he acknowledged. Canada Post recently enlisted the City of Toronto. And it's in talks with numerous federal departments, nearly every province and most major cities.
For consumers, the new ePost is about simplifying busy lives, Mr. Munro said. The average Canadian pays four bills regularly online, he added. On ePost, they'll be able to conduct transactions with potentially dozens of businesses and governments, using a single user name and password.
"You are in a platform that allows you to manage the business of your life … all seamlessly, all securely, on your own time and on your own device," he said. "That's a pretty compelling offer for consumers: to have more time in their lives."