Banking transactions and bill payments are in decline as a driver of revenue for Australia Post, with the letter delivery monopoly now looking to identity checks as an alternative source of revenue growth for its Post Office network.The annual report of Australia Post, published yesterday, said that it processed 187 million agency-based banking and bill payment transactions in the 2007 financial year, down from 194 million in 2006. Post said the number of over the counter payments fell to 158 million in 2007 from 164 million in 2006. The number of agency transactions for financial institutions also fell slightly to 28 million from 30 million. The number of billers aligned with Post increased to 722 from 681 while the number of financial institutions increased to 77 from 76.Transaction volumes as agent for Western Union Money Transfer increased by 25 per cent while sales of American Express travellers cheques and foreign cash also increased by 21 per cent. Post shut (or at least was due to shut) its Postbillbay service several weeks ago, with the service finding it impractical to compete against the BPay service of banks.In the annual report Post wrote that the take-up of broadband had caused a shift away from over the counter bill payments while billers are actively discouraging in-person transactions.The annual report also reveals that Post will close the Billmanager service under which Post aimed to help households by aggregating and averaging out payment of bills. Volumes through this service, introduced about six years ago, are not known but likely to be slight.Post will continue to provide over-the-counter, telephone and internet access for ad-hoc credit card bill payments, however.Post said it undertook 25 per cent more identity-related transactions in 2007 while revenue from this source increased by 56 per cent. Post carries out identity checks for 39 financial institutions and this is bound to rise as new laws on money laundering force banks that shirk such checks (by relying on the prior checks of other banks with linked accounts) are forced to do so.The expansion of the scope of laws on money laundering to many new businesses may also drive demand for Post.