Barclays and HSBC are among the major banks reportedly bracing for a showdown with Post Office over its cash access fees.
Major lenders are said to be going into negotiations over a new deal to allow millions of their customers to withdraw cash at the postal company’s branches, Sky News reports.
A shared interest group, which includes Barclays and HSBC, is being formed to represent the banking industry in talks with the Government-owned firm over the coming months.
The negotiations will be to discuss a new Banking Framework Agreement with the latest version set to expire at the end of 2024.
Some 30 banks and building societies participate in the current deal, paying around £200million annually collectively to allow customers banking services at the 11,500 Post Office sites.
This comes amid widespread concern about access to cash amid the wave of bank branch closures. Which? estimates around three million could be left “cashless” by the end of the year.
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Major banks are preparing to go into talks about customers accessing cash services
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The consumer watchdog has warned of the “alarming rate” of bank locations shutting down with many customers being forced to use their local Post Office instead for in-person banking services.
Sources in the banking industry are preparing for the Post Office to demand a hike to the fee it charges them for using its sites which could reportedly come to around £400million a year.
If this deal is brought forward, the sector is expecting to push back on it, citing customer data which they claim shows usage of the service has stagnated.
Last year, more than £10billion worth of cash was withdrawn over the counter and £29billion in cash was deposited over the counter, according to Post Office figures.
Martin Quinn, the campaign director of the Payment Choice Alliance, outlined why it is in the “interest” of the bank to come to an arrangement with the Government-owned company.
Quinn said: “The banks may want to play hard ball with the Post Office over the fee.
“But the fact remains that thousands of small businesses rely on banking facilities offered by the banks through the Post Office network.
“It should be in all the banks interests to keep relying on the vast network to offer choice to their customers, as many need to deposit and withdraw cash.”
A Post Office spokesperson told Sky News: “Our partnership with 30 banks and building societies ensures that no one who relies on cash is left behind, made possible by our postmasters in almost every community of the country.
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Concerns have been raised over access to cash services in the UK
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“This is all the more important following the introduction of the Access to Cash legislation and further highlights the critical role postmasters play today, and in the future, in supporting customers with accessing their cash.
“We do not comment on ongoing commercial negotiations.”
GB News has contacted Post Office, Barclays and HSBC for comment.
UK Finance, the country’s banking industry lobbying organisation, declined to comment.