Australia Post at war over letterbox future

A war is being waged over the future of the humble letterbox, with Australia Post at loggerheads with high-tech joint venture Digital Post Australia.

Both are betting that Australians will gravitate to digital mailboxes, which allow users to receive and pay bills, communicate with their providers — such as banks, telcos, electricity networks and financial services firms — and store important documents such as passports and birth certificates.

They will be accessible anywhere in the world from PCs, tablets and smartphones and can support payments directly from the mailbox, with users automatically notified when they have new mail or their bills are overdue, for instance.

DPA chief executive Randy Dean said email was too insecure for transactional mail and most businesses did not send important documents over email for security and privacy reasons. Therefore, those who want to interact with providers online need to have individual accounts and logins with many different sites.

"Everybody has email but their transactional mail is something they largely get on paper," said Dean, adding the digital mailboxes verified both the sender and receiver of mail.

Guy Cranswick, an analyst at research firm IBRS, isn't convinced. "The digital post box seems like something that would have been innovative 10 years ago," he said.

Both Australia Post and DPA claim state-of-the-art security, but security experts including consultant Nigel Phair warn that there are risks with keeping such sensitive documents in the one place.

Phair said it would be a honeypot for identity thieves who could gain access using phishing attacks.

"This is the problem with putting all of your identity eggs in the one basket," he said.

Australia Post and DPA say their digital mailbox services are being privately tested by thousands of customers.

From Wednesday DPA is allowing users to sign up and create their verified mailbox but mail won't start flowing into it until early next year.

Australia Post was forced to suspend registrations for its Digital MailBox within days of it going online after discovering "a technical issue", but it is now back online, with a full launch also expected next year.

An Australia Post spokeswoman said the issue was not hacking related despite hacking being reported on other parts of its website around the same time. "The mailbox was never under threat and never compromised."

Australia Post unsuccessfully sued DPA claiming trademark and other infringements and is now appealing. Australia Post chief executive Ahmed Fahour told a Senate estimates hearing in October that the outcome was "a huge injustice".

Privately, Australia Post sources say DPA copied its idea, not just its name, but DPA says it had been in development for well over a year before Australia Post announced its service.

For Australia Post, its $2 billion digital transformation is seen as critical to the future of the business.

"We had a monopoly. We had a 100 per cent market share 20 years ago and today we have less than 1 per cent of the market share of all communication," Fahour said. "Where did the other 99 per cent go? It has gone to digital communication."

DPA's Randy Dean is happy to stand in Fahour's way. "The internet history museum is filled with the fossils of many companies that not only did not thrive but did not survive the digital transformation of their businesses [including] Kodak, Border books, Virgin Megastore and the like," he said.

Late last month Australia Post "launched" its service with Communications Minister Stephen Conroy and revealed it was being supported by several large companies including Telstra, AMP, Westpac, ANZ, Bendigo and Adelaide Bank, Link Market Services, NAB and Yarra Valley Water.

Being a government-owned organisation has also allowed Australia Post to partner with the Australian Tax Office and the Department of Human Services, both of which are exploring how to use the service to communicate with citizens about government services.

"This group of mailers that have partnered with Australia Post represents more than 70 per cent of the mail volume for Australia's top 10 mailers," Fahour said.

DPA disputes Fahour's claim but refuses to say who its partners are or even how many it has signed up.

It claims its joint venture partners Computershare and Salmat (now owned by Fuji Xerox) already store, manage and print more than 75 per cent of all essential mail in Australia.

"Australia Post's sole relationship with that mail is picking it up in pre-sorted boxes and sending it out on trucks for delivery," it said.

DPA is using technology from US digital mailbox provider Zumbox to power its back-end, while Australia Post is using technology from Volly, which has delayed the launch of its technology from January 2011 to some time next year.

DPA believes it will launch its full digital mailbox service first, locking in a February 2013 date.

"Despite what Mr Fahour would like the market to believe, this business is about delivering, not announcing," DPA said.

"Judging from their many recent technical mishaps, including the failure of their Digital Mailbox pre-sign-up form, Australia Post is discovering that it is much more difficult to deliver reliable digital services than to talk about them in the press."

As for junk mail, Dean said there would be a marketing component to DPA but these messages would be separated from the user's main box and individual providers could be blocked at any time.


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