British Banks to Talk Cash Withdrawal Agreement with Post Offices 

British banks, including Barclays and HSBC, are gearing up for negotiations with the Post Office to renew a deal allowing millions of their customers to withdraw cash from its branches. These talks will involve forming a shared interest group to represent the industry in discussions with the government-owned company over a new Banking Framework Agreement, replacing the current iteration set to expire next year.

Approximately 30 banks and building societies participate in the existing agreement, collectively paying around £200 million annually to enable customer access to the Post Office’s 11,500 branches. This service holds significant value for individuals reliant on physical cash, particularly amidst a period marked by the closure of nearly 6,000 bank branches across Britain over nine years.

Industry sources anticipate potential pressure from the financially challenged Post Office to increase the fee charged to banks for utilising its sites, with speculation suggesting it could seek up to £400 million annually. However, banks are poised to resist such demands, citing data indicating stable usage of the service among bank customers.

In 2023, the Post Office reported over £10 billion in cash withdrawals and £29 billion in cash deposits over the counter, underscoring the continued importance of its services.

These negotiations come at a critical juncture for the Post Office, grappling with reputational damage from the Horizon IT scandal and wrongful convictions of numerous sub-postmasters. Despite annual government subsidies, the network faces significant challenges, making its partnership with banks crucial in ensuring access to cash for all individuals.

A Post Office spokesperson emphasised the importance of their partnership with banks in facilitating cash access for communities across the country, particularly in light of Access to Cash legislation. However, they refrained from commenting on ongoing negotiations.

UK Finance, the banking industry’s lobbying organisation coordinating the establishment of the shared interest group, declined to provide further comment.