Table 5: Financial Projections with Active Management and Online/Mobile Channel
2015 Year 1 Year 2 Year 3 Year 4 Year 5
Volume (post ofce) 92,776,494 69,582,371 66,103,252 66,103,252 67,425,317 68,773,823
Volume (online/mobile) 23,194,124 27,832,948 32,007,890 36,809,074 40,489,981
Total volume 92,776,494 92,776,494 93,936,200 98,111,142 104,234,391 109,263,805
Average money order fee $1.30 $1.33 $1.36 $1.39 $1.42 $1.45
Estimate of mailed money orders 46,388,247 46,388,247 49, 8 67,3 6 6 54,042,308 59,28 4,180 63,414,589
Revenues
Fee revenue (post ofce) $120,616,369 $92,549,748 $89,905,358 $91,888,456 $95,748,984 $99,727,179
Fee revenue (online/mobile) $30,849,916 $37,854,888 $44,493,357 $52,271,633 $58,713,496
Interest on oat $1,669,713 $1,669,713 $1,669,713 $1,669,713 $1,669,713 $1,669,713
Escheated money orders $38,239,599 $36,196,087 $37,475,150 $40,004,063 $43,418,004 $46,474,458
Postage revenue $22,730,241 $22,730,241 $24,435,009 $26,480,731 $29,049,248 $ 31,073,149
TOTAL REVENUES $183,255,922 $183,995,704 $191,340,118 $204,536,320 $222,157,582 $237,6 57,9 9 3
Expenses
Volume variable cost (post ofce) $102,503,680 $71,133,179 $67,576,520 $67,576,520 $68,928,051 $70,306,612
Volume variable cost (online/mobile) $15,807,373 $18,968,848 $21,814,175 $25,086,301 $27,594,931
Product specic cost $2,604,240 $2,710,551 $2,710,551 $2,710,551 $2,710,551 $2,710,551
Fulllment center equipment/app
development
$1,000,000
Marketing/
merchandising $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000
First Class Mail single piece cost $12,739,329 $12,739,329 $13,694,779 $14,841,318 $16,280,863 $17,415,172
TOTAL EXPENSES $117,8 47, 24 9 $104,390,432 $103,950,698 $107, 9 42,5 6 5 $114,0 05,765 $119,027,266
Contribution $65,408,673 $79,605,272 $87,389,420 $96,593,755 $108,151,817 $118,630,727
Cost coverage 156% 176% 184% 189% 195% 200%
*Totals may not sum to due to rounding. This is an illustrative example. Actual results would depend on execution, market conditions, and other factors.
Modernizing the Postal Money Order
Report Number RARC-WP-16-007
35