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DQ News: Digital Mailboxes to Kill USPS

Business Week:

As if the U.S. Postal Service weren’t already in enough financial trouble, a growing number of startups are about to make its future even more uncertain. They’re trying to lure one of its main revenue sources—the nearly 48 billion bills, statements, account notices, and offers that companies send to households every year—into the electronic realm. That could make the USPS’s $3.1 billion third-quarter loss seem like small change. The companies aim to do so with secure online services that, unlike e-mail, are inaccessible to spammers and allow consumers to receive, organize, and respond to important correspondence all in one digital place. Matt Swain, associate director at research firm InfoTrends, calls the technology “a potential game-changer.”

Zumbox, a Los Angeles firm launched in December 2009, was the first digital mail service out of the gate. With $17.7 million in venture funding from private investors including former Walt Disney (DIS) Chief Executive Officer Michael D. Eisner, the company is creating a digital mailbox for every street address in the country. (Ironically, it’s using a freely available USPS database to do so.) When customers sign up, Zumbox mails them a PIN which they must use to register their account, a step that verifies the link between the virtual Zumbox and the real-world address. That assures mail senders that information is going to the right household. Users can then access their Zumbox, free of charge, to receive and store electronic mail, pay bills, and opt out of paper mailings. “There’s sort of an inevitability about the migration of the mail to digital,” says Zumbox CEO John Payne.

Photo by mrjoro.

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