Post Office announces new agreement over access to everyday banking services

Bank customers will continue to be able to access a range of their providers’ everyday cash and cheque services through the Post Office after a new agreement was reached.

But consumer campaigners said a decision by Barclays to end over-the-counter cash withdrawals from Post Office branches for its customers next year “exposes the fragility of the UK’s cash system”.

Bank agreement with the Post Office
A customer withdraws cash at the Post Office in Bamford, Derbyshire (Lucy Ray/PA)

The Post Office said 28 banks have reconfirmed their commitment through the three-year agreement that their customers can access cash and cheque banking services at its branches.

But the Post Office said it was “disappointed” that Barclays has chosen to stop allowing its customers to make cash withdrawals from January 8 2020.

Barclays’ customers will still be able to access other services such as continuing to deposit cash and cheques at the Post Office after this date.

The Payment Systems Regulator (PSR) also said it is concerned about the impact of Barclays’ decision.

It said: “We will be closely monitoring the steps Barclays plan to take to make sure there are suitable alternatives for its customers to access their cash – especially those who rely on cash or who live in rural areas.”

The PSR added: “We are considering whether (ATM network) Link’s current policies on the Post Office are still appropriate and also whether we need to use our regulatory powers to further ensure public commitments about the ongoing availability of access to free-to-use ATMs for UK consumers are met.”

Which? recently found that Barclays had closed 481 branches – around a third of its network – between the start of 2018 and August 2019.

Which? money editor Jenny Ross said: “Barclays’ shocking decision exposes the fragility of the UK’s cash system, and blows apart industry claims that the Post Office network is a solution to the cash crisis.

“This latest move highlights how easily we could drift into a cashless society if we rely on disjointed industry initiatives alone.

“That is why the Government must step in and introduce legislation that guarantees consumers can continue to access and pay with cash for as long as it is needed.”

Barclays has separately announced that it plans to introduce a cashback scheme from next year involving small businesses, and has pledged not to close branches in remote areas or where it is the last bank in town for the next two years.

Bank agreement with the Post Office
The new Post Office agreement with 28 UK banks will ensure millions of people have free access to everyday banking services (Lucy Ray/PA)

The 28 banks and building societies that have reached the agreement with the Post Office are Allied Irish Banks, Bank of Ireland, Bank of Scotland, Barclays, CAF Bank, Cahoot, Clydesdale Bank, The Co-operative Bank, Danske Bank, First Direct, First Trust Bank, Halifax, Handelsbanken, HSBC UK, Lloyds Bank, Metro Bank, Nationwide Building Society, NatWest, Omnio, Payment Cloud Technologies, Royal Bank of Scotland, Santander, Smile, Starling Bank, TSB, Ulster Bank, Virgin Money and Yorkshire Bank.

Last year, the Post Office, which has more than 11,500 branches, handled some 130 million transactions on behalf of UK banks.

The Post Office said more than a quarter (28%) of people withdrew cash at their local branch in the last year.

Reductions in bank branch and ATM numbers have fuelled concerns that people, particularly those in rural or deprived areas, may find themselves cut off from the ability to access cash.

The Post Office said its branches can offer people “a real lifeline”.

Martin Kearsley, director of banking services, Post Office, said: “We have been working with the banks to ensure we have the right service levels across our network to meet their customers’ needs and to ensure our branches receive a fair remuneration for providing these vital services.

“We’re delighted to have signed this agreement with almost every UK bank, ensuring that their customers, no matter what their personal circumstances or location may be, can have convenient and secure access to everyday banking services such as cash withdrawals and deposits.

“With 93% of people living within a mile of a Post Office, our branches are ideally situated to provide easy access to vital banking services.”

Postal Affairs Minister Kelly Tolhurst said: “Post Offices provide a vital public service to local communities up and down the country, including by offering banking services.

“I am delighted that banks have signed this new agreement, enabling the Post Office to continue positively impacting people’s lives and supporting SMEs, as well as ensuring postmasters’ pay is fair and reflective of the essential service they provide.”

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