This article is by David Glance, associate professor and director of the University of Western Australia Centre for Software Practice. It originally appeared on The Conversation.
analysis Australia Post have every reason to be pleased with their role in the online shopping revolution. They are central to the process by providing a means of converting the virtual into the real, by delivering online shoppers’ purchases to their doorstep or mail locker. This has resulted in Australia Post “posting” a $281 million profit for 2011/2012. This was despite a $148 million loss in the traditional mail business.
On the back of this success — and perhaps over confident in its mastery of the Internet — Australia Post has announced a $2 billion investment in upgrading its national parcel network and in providing a service called the “Digital MailBox”.
Mail re-imagined in the digital world
The Digital MailBox is due to launch in the next few weeks. Details are sketchy at this point. It will be a service that provides the ability to receive secure communications from companies and organisations also using the service. It will also allow you to receive and pay bills.
The “secure” portion of Digital MailBox will be provided by Telstra’s Australian-based cloud. There will also be two-factor authentication, which provides extra security when people log into the site. This will presumably be via a text message that provides a time-based one-off password in addition to the user’s regular password. Australia Post may also require some sort of identification process in order to set up an account so that the account identifiers can be used in the confidence that they are actually linked to the people they are supposed to be linked to.
A good idea — but hasn’t it been done before?
The idea of providing this type of service is not necessarily a bad one, given that there are already successful services that already do much of what it is proposing. To a large extent, it is an extension of what the banks and Australia Post themselves are already providing with online access to services such as BPay and Australia Post’s own POSTbillpay.
The subtle difference (possibly too subtle) with Digital MailBox is that the service can theoretically be used beyond just paying bills. Dealing with government agencies could be done through this mechanism because the communication is both secure, the party’s identities can be verified and, possibly more importantly, the communication can be tracked. The service will be free of spam and thus reduce the likelihood of important messages going missing or being missed in the general flow of other communications.
The challenge for Australia Post in launching this service is twofold. The first challenge is as previously mentioned: the competition from existing and new services that largely provide some or all of what they are proposing to offer. The second and probably crucial issue is convincing the public and organisations that the service is necessary at all.
The competition
Australia Post faces challenges from the banks — who already provide the ability to pay bills from their online services — and from direct competitors in the secure mailbox space.
One such competitor is Computershare, who has proposed a similar service called Digital Post. Digital Post is almost identical to the Digital MailBox, so much so that Australia Post took Computershare to court to try and prevent is using the name Digital Post. It lost the battle, leaving the coast clear for a race to see who can provide the service in Australia first.
Here, Computershare may have the advantage, having already launched a service publicly in the US in partnership with Zumbox. It has also launched the service in Australia in a limited private release.
A solution to a non-existent problem?
The big question however is whether digital mail is a solution looking for a problem that hasn’t already been solved. Here, I am not convinced. The technology to achieve a digital mailbox using ordinary email with digital signatures and encryption has been around for a very long time. Despite improvements in infrastructure and the ease of use, it has never really taken off, mostly because there has never been the perception that it was really needed in the first place.
Another big problem has been that digital signatures and identity services were fine as long as you were dealing with the purely digital, but never really quite accommodated the need to also operate in the physical world. One immediate irony is that to prove identity, you often have to present paper copies of bills sent to a postal address! Even Computershare CEO Stuart Crosby had a hard time convincing a slightly sceptical Alan Kohler of ABC’s Inside Business that Digital Post Australia was a viable business proposition. He said “One of the exciting things about these sorts of businesses […] is that you don’t know the answers”.
I expect that Australia Post is none the wiser. Fortunately for them, they don’t have shareholders asking those questions, including what part of the $2 billion is going to be invested in this scheme. If they did, I expect they would be prepared to never see that money again.
David Glance does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published at The Conversation. Read the original article. Image credit: Australia Post
Mmmm, seems unlikely to really takeoff. I’ve no idea what I’d use it for. Ironically, it would be useful if you would use it to store digital copies of things like your passport that could then be used as identification anywhere…..except digital copies aren’t considered a valid form of ID….
I’m more interested in Aust Post’s getting into reselling of the NBN. Could be a very interesting and good little money maker…..
“I’m more interested in Aust Post’s getting into reselling of the NBN. Could be a very interesting and good little money maker…..”
NBNCo aren’t allowed to sell their own services to the consumer for a reason, another GBE selling them seems a little shady to me.
@Karl
No no, Aust Post are REselling. ie, via an NBN RSP. Telstra, NextGen, Optus, they all have NBN “wholesale” services they’re offering.
Aust Post themselves aren’t selling NBN services direct. I think it could work quite well.
Oh yes I know they are reselling, but it’s not a very good look is it? And what advantage would they bring really? Just another reseller isn’t going to do much for the consumer.
They only way they would make a difference is if they did sell themselves, which is a bad idea, but given they’re a big company they’d probably have the capital to do it.
Personally I think all government interests should be blocked completely from having anything to do with selling NBN services, there is no reason to start going down that road.
@Karl
I don’t really understand why you think it is a bad idea? They are 2 completely separate entities and are independently operated. They simply share their equity sources.
AustPost will likely target the older generation who use the Post Office for most of their banking/bill needs. It would be a niche, but significant market that I think they could capitalise on well.
I’ve no issue with them reselling the NBN services.
To prevent vertical integration.
Auspost + NBNco != vertical integration
I agree that it’s a hard sell.
The biggest problem for them will be differentiating their “secure” email account from regular email and the HTTPS world that has spent squllions convincing Joe Public – and website owners – that the little padlock makes it safe.
The next problem is that they need to get lots of senders to sign up to gain critical mass. If they only plan to sign up .au companies and government, how well does that work for the global internet where many folks deal with entities all over the world: itunes, amazon, ebay, etc.
The third problem is that it’s hard to understand why anyone (commercial entities in particular) would want to put a middle-man between themselves and their customers. Commercial web sites get valuable information from their interactions with customers and Auspost as a middle-man are only going to blur that information flow. Reversing the last decade of disintermediation is a tough hill to climb.
Finally, it’s a solved problem. All the high-value interactions like banks and shopping sites have already invested in secure interactions and secure payment systems. Many banks, e.g. have an internal mailbox for customers that you access via HTTPS. These systems have long been deployed and will need to stay deployed even if Auspost garners an unlikely 50% of their custom. So, from a sender perspective, Auspost is incurring more cost and complexity on entities that have already solve the problem their own way.
Oh, I forgot. This has been tried before in a lighter-wieght version called goodmail.com. How well did they fare? You’ll need to use the wayback machine to find vestiges of their website.
When they say digital mailbox – I want a proper digital mailbox, i.e.: I never receive another piece of physical mail ever again that isn’t a post card, invitation or handwritten letter.
What I need is for the Post Office to scan my physical mail (or address label) and make it available via the web for when I am traveling. I use a commercial service for this now, but it is expensive and requires me to re-direct my mail from my Post Office box, and then back again when I return.
I think that the most important (and most expensive) part of this upgrade is the upgrade to its national parcel network.
I just hope they increase the maximum length allowed for parcels from 1.5m to 2m to allow for long skinny objects like snow skis – are you listening Aust Post?
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