The Problem With the Lack of PC Postage Providers

Ever heard of a PC postage provider? We wouldn’t blame you if you haven’t; it’s a term that most aren’t familiar with. However, if you’ve ever bought postage online, you’ve actually used one without even knowing it!

Here’s why we’re talking about them today: the Office of the Inspector General (or OIG) is concerned that more vendors haven’t joined USPS’ PC postage program since the year 2000. There are currently only four PC postage providers for the US Postal Service, and the Office of the Inspector General argues that the reason for the severe lack of PC postage providers comes down USPS themselves.

What is a PC Postage Provider?

A PC postage provider is a partner of the Postal Service that allows shippers to access discounted USPS postage through online shipping software. When customers use a PC provider, they can buy postage online and print them off from their homes.

There are currently four PC postage providers for USPS: Stamps.com, Pitney Bowes, EasyPost, and Endicia. Even though there are only four providers, they are critical to USPS’ survival. The OIG provided a quote on that highlights their importance:

“PC Postage gives smaller customers a way to access…shipping labels no matter the time of day and without a trip to the post office.”

eCommerce businesses across America rely on PC postage providers to ship their products. As eCommerce continues growing year over year, PC postage providers will play an even bigger role in USPS’ business model.

Why More PC Postage Providers Would Be a Good Thing

The reason there are only four PC postage providers is due to the high barriers of entry for new ones to enter the marketplace. These high barriers of entry result in a lack of competition. In any other industry, competition drives down prices. This obviously ends up being good for consumers. However, USPS is the one setting all postage rates paid by consumers in this scenario, not the postage providers. Since USPS sets all these rates, there is little to no incentive for existing postage providers to stay innovative.

The OIG offered up another quote regarding the lack of innovation in this space:

“The lack of competition may be responsible for the lack of technological innovation in this space. PC Postage technology has not substantially changed over two decades. Former technologists from PC Postage providers and the Postal Service say that providers use older systems which tech companies consider outdated.”

Put simply, more PC Postage Providers would be good for USPS’ business, since USPS would end up selling more labels and earning more revenue. Considering the troublesome financial situation USPS is currently in, the more revenue the organization could generate, the better. Consequently, USPS should encourage new PC postage providers to enter the marketplace instead of sticking with the current high barriers of entry.