As the economy ebbs and flows, the eCommerce payment gateway industry could continue to be affected. Things have been moving in a positive direction, but the new Postal Service proposal could have the opposite effect.
The proposal is a possible move to a five day delivery week, cutting out Saturday delivery. By 2020, the United States Postal Service (USPS) expects a 228 billion dollar deficit from the severe volume declines. In layman’s terms, people are sending out much less mail. This isn’t too shocking, considering how many people gravitate toward private shipping companies such as FedEx and UPS. Nonetheless, the USPS tends to be a cheaper alternative, and many companies offering eCommerce use it for delivery.
A proposal was put forth, originally, to change priority shipping from 1-3 days to 2-5 days, but it has since been revoked, according to The New York Times. Of course, such a possibility may always exist if the trend of declining volume occurs more exponentially than expected.
According to Auction Bytes, “A possible move to a 5-day delivery schedule and likely fee changes could mean that online sellers who currently use the U.S. Postal Service might have to change the way they do business to satisfy consumer expectations.”
With changes in fees, the prices consumers are used to paying for shipping could change, thus being problematic to those responsible for shipping. If the opportunity cost of heading to a store to buy an item rather than purchasing it online is high enough, users may forgo the ease of using the Internet.
There is no need to panic though. There are other ways of shipping, and many eCommerce companies do use private shipping companies for delivery. And, if the proposal does go through, all companies will be dealing with the same changes, so it may not be as shocking to a consumer as some predict.
Of course, nothing is set in stone. This is merely a proposal, and there has been a good bit of opposition to it. In fact, according to Auction Bytes, “The President of the 300,000-member National Association of Letter Carriers (NALC) opposed the proposal in a statement on Tuesday. Fredric Rolando said, ‘I do not believe that weakening our commitment of six-day service to the public will enhance the long-term position of the Postal Service as a critical element in our nation’s economic infrastructure. In view of the January report released by the postal Inspector General that showed that the USPS was overcharged by $75 billion for postal pension costs, Congress instead should take immediate steps to correct the error.’”
Even so, if you are an online merchant using eCommerce payment gateways, it may be a good idea to let your voice be heard on this proposal.
Tags: credit card processing, ecommerce payment gateway, internet payment gateway, Online Payment Gateway
