DMA: Rate Rise Will Spur Online Bill Payment

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The upcoming postage rate increase will accelerate the movement of younger Americans away from First-Class Mail for bill payment, according to a Direct Marketing Association survey.


More than half of respondents younger than 25 and 42 percent of those ages 25 to 34 said the 3-cent increase in a First-Class stamp June 30 will lead them to look for bill-payment alternatives, such as electronic bill payment, within six months.


The DMA surveyed 1,028 adults living in private households last month. The survey shows that the USPS business plan is disconnected from the demands of younger generations and the stiff competition in today's electronic and private delivery marketplace.


Bill payment, or transactional mail, accounted for almost half of all First-Class Mail in 2000. The DMA said the postal service will be unable to continue relying on growth in First-Class volume as more people become comfortable with conducting transactions online.


"Without the implementation of changes that would increase productivity and efficiency, a decline in volume would result in the costs being passed along to consumers in order to cover overhead," DMA president/CEO H. Robert Wientzen said. "This cycle will inevitably lead to the extinction of our postal system."


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