AusPost's digital mail challenge

The $2 billion digital rebirth of Australia Post is a bold, some might say belated, move by an incumbent player to change the way it does business.

One integral feature of AusPost's push to reinvent itself is its entry in the secure digital mail segment through “Digital MailBox”. With the traditional mail business withering on the vine the digital world provides a path to renewal but AusPost isn't alone in having its heart set in providing every Australian a digital mailbox.

It's a sentiment shared by the latest entrant in the sector Digital Post Australia (DPA) and the existing heavyweight in the local payments space BPAY, which has been operating a digital mail service for the last 10 years.

As far as AusPost's rivals are concerned - BPay certainly isn't losing any sleep about the impending launch of Digital Mailbox and Digital Post Australia reckons that AusPost has its fingers in too many pies to be able to really deliver a top-notch digital mail service.

BPay's big advantage

BPay's confidence stems from the fact that its 10 year old BPay View platform has sent over 50 million items of digital mail and has over 100 organisations signed up. What's more the company is evidently keen to further enhance its presence in the digital mail sector.

According to BPay's general manager, business services Keith Brown, the digital mail sector is ripe for growth and BPay is ready to take its game to the next level.

“Being ahead of the curve, the market leader in the area, we are intending to capture more growth in that area through national promotion, extending the capabilities to the next level of organisations and extending the service into the mobile channel,” Brown told Technology Spectator.

He is also quick to point out that BPAY is uniquely placed to leverage its core strengths: the fact that BPAY is delivered through the online banking channel, a healthy network of 160 financial institutions that are all members of the scheme and the 40,000 bills than can be paid via BPay.

“The network effect is really key for us and that's what we can leverage within our digital mail service,” Brown says.

BPay is confident that its existing network of customers combined with the appeal of a single point of payment – that is the ability for consumers to receive a bill within their specified internet banking portal and pay it in a single click – gives it an important edge over its rivals.

“Receiving something in an email still requires a user to go to their bank's site or the biller's site with another login and that's an extra step that people don't want to do,” Brown says.

He adds that Digital Mailbox and DPA are going to be at best niche players and most customers will prefer an offering that automatically links them to their banking portal.

“AusPost and DPA might be aggregating the bills together but customers will still need to go somewhere else,” and Brown reckons that BPAY View is the one stop shop that many customers have already developed a taste for.

DPA's laser focus

Meanwhile, the new kid on the block DPA- a joint venture between Computershare, Salmat (whose 40 per cent stake was recently picked up by Fujifilm Holdings) and US-based Zumbox- is under no illusion about the task it's facing but it does have a distinct strategy.

DPA chief executive Randy Dean told Technology Spectator that unlike AusPost DPA isn't interested in replacing BPay as a payment provider but rather leverage its technology to become a top-notch payment facilitator.

“We are not trying to necessarily disinter mediate BPay, which is a big player in the payment space. Our goal is to make it easier for consumers to manage and pay their bills,” Dean says.

According to Dean, Aus Post's strategy to leverage its digital platform to aggressively attack a number of sectors could be its Achilles heel when it comes to digital mail.

“We are trying to create more digital consumers to the benefit of businesses and we are trying to give consumers a service that solves a particular pain point.” Dean says

“What we are not trying to do is aggressively go after payment platforms because banks are already in that space and companies already have established payment pathways that they like customers to go to.”

“If we told a business that we like its content in our system and we would like it to reach consumers this way but then at the same time compete with it on payments, then that's not a great message to them. We don't think we could operate effectively like that and Aus Post will have difficult time with regards to that.”

The other plus point Dean is keen to stress is DPA's core focus on becoming the best provider of a digital postal service and its willingness to partner with businesses rather than compete with them.

“Aus Post is building a platform to attack a lot of businesses while we want to be seen as a partner by them not a competitor. From a consumer perspective we have one product and we are laser-focused on that. Aus Post doesn't have that luxury they have a bunch of businesses and a lot of [legacy] dynamics to deal with,” Dean says.

Fight for the digital customer

The battle for the mailbox centres around bills, how we receive them and how we pay them and perhaps the biggest test, not just for AusPost but all involved, is convincing those who wonder why we need this service in the first place.

At its heart this transition from a paper world to an electronic one revolves around harnessing the growing digital awareness of consumers. AusPost, BPAY and Digital Post are all trying to target what they describe as a growing appetite within both consumers and biller/senders.

One feature they are quick to champion is security and targeted delivery. Receiving and delivering a bill over email runs the risk of getting lost in SPAM filters and businesses are not convinced that the email is a secure environment.

Digital Post's Dean says that the security is a key motivator for businesses many of whom are looking for more secure and reliable delivery pathways. What businesses are worried about is that email might not be an effective delivery model, especially when consumers are being encouraged to be careful about what they click on to counter sophisticated phishing operations.

“Email is an open system of unknown senders to unknown receivers,” Dean says.

“Our system is a closed secure system of certified senders to verified users, so if you get a piece of email from our system you can be sure that it is from your bank. By the same token we certify every consumer at their physical location so the bank can feel secure that email has delivered to the right recipient.”

“So the senders and consumers can both feel good about delivery without worrying about SPAM filters and malicious attachments,” he adds.