AusPost scores fee windfall under watershed CBA deal
Australia Post has confirmed that mutual banks and credit unions will not have to pay an annual "community representation fee" to participate in the Bank@Post banking service, but will potentially face steeper transaction charges under revised agreements.Meanwhile, Australia Post is pushing hard for ANZ, Westpac and NAB to begin paying the same large annual representation fee that CBA has just agreed to.In a watershed deal announced yesterday, Commonwealth Bank confirmed that it will begin paying an annual community representation fee of A$22 million to maintain access to Bank@Post for its millions of customers over the next five years.The country's largest bank has also agreed to increases in the transaction charges it pays Australia Post.CBA estimates that about 30,000 of its customers use an Australia Post outlet to conduct over-the-counter transactions each day.The banking service, which is currently used by customers of more than 70 deposit-taking institutions in 3500 locations across Australia, has been a loss-maker for Australia Post for most of the last decade.Australia Post is pushing hard for the three other major banks to begin paying the annual representation fee agreed to by CBA, although the corporation's chief executive Christine Holgate said that smaller deposit taking institutions would be spared the new charge."We continue to have positive and productive discussions with the other three major banks to seek their support for this service," Holgate said."Australia Post has proposed that they each commit to a community representation fee of $22 million and revised transaction fees. "If they also agree to a five-year commitment, this could deliver up to $500 million of additional investment over this period, the largest ever for Australia Post Offices, securing their future and helping protect the prosperity of all communities across Australia."Mutual providers will also be subject to revised transaction charges as Australia Post's management moves to place the Bank@Post service on a sustainable business footing.Holgate did not reveal how much nominal transaction charges were likely to rise by, but indicated that Australia Post had room to vary fees and charges under its operating agreements with financial providers.Closure of the CBA deal is expected to hasten the settlement of long-term deals with the other big banks.A banking industry source said a major sticking point in the negotiations with ANZ and NAB had been Australia Post's push for a flat $22 million annual representation fee.The two Melbourne-based banks have argued they should pay a lower fee because they each have fewer customers using the Bank@Post than CBA.Holgate said if the other major banks signed on for long term deals, Australia Post would invest up to $500 million to upgrade the banking technology underpinning the Bank@Post service.She also confirmed that Australia Post licensees stood to reap significant revenue gains after the CBA agreement was bedded down."This agreement will allow Australia Post to increase Bank@Post base transaction payments to our hardworking Post Office licensees by approximately 50 per cent from January 1st 2019, as well as investing in infrastructure including technology and security upgrades, and local marketing. "Additionally, we