Applying postage with a keystroke

Nation's Business, Dec, 1997

Plug-in devices for personal computers are designed to simplify metered mailings for small firms--and reduce chances for fraud.

Anyone who has lugged one of those briefcase-size mechanical meters to the post office for periodic infusions of postage credit will welcome the news: Beginning in 1998, the old mechanical machines can be replaced with a new electronic postage-metering device that plugs into a personal computer. It's smaller than a computer mouse and never has to be taken to the post office.

By early 1999, the U.S. Postal Service says, most mechanical postage meters, which have been leased or sold to many small firms and home businesses, should be phased out.

"This new system will provide all the convenience and flexibility that large mailers have--right on your desktop," says Pam Gibert, a Postal Service vice president for retail operations.

The plug-in devices will not be for everybody, however. Because they are designed for Windows-based PCs, Apple Macintosh computers will not be able to accommodate them. It is expected that before the end of the decade, private companies will develop a similar product for use with Macs.

A Fraud Deterrent

Development of the so-called desktop post office is an outgrowth of the Postal Service's efforts to prevent fraud in the use of mechanical postage meters. Without explaining how such fraud is committed, the Postal Service says it loses an estimated $100 million annually from theft of metered postage.

The new digital devices, designed to be fraud-proof, get postage-value refills online through an electronic-transfer arrangement that the business sets up with one of the companies authorized to supply the devices and the software that activates them. Postage can be paid for online with a credit card or through a special billable account. To thwart those who may attempt to steal digital postage, the online transactions will be protected by encryption--a technology for scrambling data to keep it secure during online transmission. (See "A Code-Red Issue In Communications".)

Once a plug-in device is loaded with digital postage, the accompanying software, upon command, tells a printer to put postage on an envelope along with the recipient's address.

"As you can imagine, security is most important because it's kind of like printing money in your office or home," says Nicole Eagan, marketing vice president of E-Stamp Corp. in Palo Alto, Calif. The firm is one of several that will market the new desktop post-office systems.

David A. Gewirtz, chairman of Component Software Corp., a Rocky Hill, N.J., firm that makes software for the devices, says the new technology is "great for a small office with a modest mail flow because you don't have to run to the post office all the time for stamps or lug your meter machine in for refills."

Options For Users

The desktop postage equipment will be on the market in some parts of the country early in 1998 and will be available nationwide later in the year. Users will have the option of purchasing the hardware and software for about $300 through office-supply and computer stores or leasing the system from an authorized vendor for $10 to $20 a month.

The software uses a Postal Service online database to ensure that addresses have the proper ZIP code, says Steve Pietz, marketing manager for Neopost, a Hayward, Calif., company that will market desktop post-office packages. The company also offers--for under $100--a separate electronic scale designed to help ensure that the correct postage is being applied.

Pitney Bowes, a Stamford, Conn., company that is the world's largest manufacturer of mailing equipment--and whose name is on many small firms' postage meters--plans to offer a desktop-PC system similar to E-Stamp's and Neopost's next year. Pitney Bowes already offers a standalone, computer-connected postage meter that is refilled electronically via modem.

While the new desktop postage-metering system will be convenient, some prospective users express concern about possible glitches. Component Software's Gewirtz, for example, wonders about envelopes that get jammed in printers or smudged with ink. "Will you have to take the crumpled and smudged paper to the post office to get a refund?" he asks. Yes, says the Postal Service, you will have to bring in "spoilage" to get your money back.

As desktop digital postage saturates the small-business market, "the colorful old stick-one [stamps] might enjoy some sort of a comeback," says consultant Jeff Berner, author of The Joy of Working? From Home (Berrett-Koehler, $13.95). Stick-ons can be used "as special attention-getters because they'll stand out as a personal statement in all those piles of metered imprints."