Digital mailbox services off to the races in Australia

The market appears ready for a secure alternative to email for sending communications

The soft launch of two digital mailbox services in Australia this month could finally signal consumer readiness for a secure alternative to email for sending sensitive communications.

On Monday, Australia Post began soliciting people to sign up for its Australia Post Digital Mailbox, a Web-based application for receiving bills and a storage "vault" for important items such as tax documents and passport copies.

Less than two weeks ago, a consortium of three companies called Digital Post Australia (DPA) announced its online postal service, which will allow people to receive exact replicas of their physical bills online from only verified senders via a web portal. It too will offer a vault for important documents, as well as indefinite storage of bills.

Both services will be free for consumers. Australia Post and Digital Post Australia will be competing with each other to sign up big mailers who want to cut their physical mailing costs by up to 70 percent by going online with a secure service. Marketers will also be allowed in, but only with consumers' permission.

The concept of a digital mailbox has been around for years, but changing consumer preferences, broadband penetration and the failure of email has given it a new push.

For a long time, people thought email's security problems would be solved, said John Payne, CEO of Zumbox, the company providing the technology platform for DPA. But email is actually perhaps one of the Internet's greatest source of security problems due to phishing attempts, malicious links and other scams.

"E-mail is an open system of unknown senders and unverified recipients," Payne said.

Zumbox verifies consumers by sending a PIN code to their physical address, which customers then use to open their online account. Senders of digital mail are verified by Zumbox, making it a closed system that scammers can't penetrate. Australia Post is not revealing many technical details of its system, due to its launch later this year, but said it will also only allow "authorized" senders as well as receivers.

Many companies now send their customers an email telling them new account information is available but do not send any sensitive information. The consumer then has to go to the company's website and login, which leads to another problem: remembering logins and passwords for many websites.

Digital mailboxes with verified senders consolidate all of the communications from different companies and organisations in one place with one set of credentials.

Zumbox launched its "Digital Postal Mail" service last June in the USPayne said its customers number in the "hundreds of thousands," with senders signed up including American Express, Comcast, AT&T, Time Warner Cable and Verizon. Despite being competitors, Zumbox has a good relationship with the U.S. Postal Service, which is still studying digital delivery systems, Payne said.

Australia was a "perfect" place to launch next due to a tech-savvy population and a low number of high-volume mailers. For example, Australia has about four major banks, compared to thousands in the U.S., and three major mobile operators. "It was much easier to get a well-organized market offering," Payne said.

But Australia Post, which has struggled financially with falling letter volumes, isn't going to give up. It plans to market itself as a trusted broker for online communications with its Australia Post Digital Mailbox due to its long history of handling people's sensitive information.

Alex Twomey, general manager for Australia Post's external affairs, said the organization's research shows that "if people don't know or trust the company in the middle," they will not engage with the service.

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