Post Office may follow tender success with current account

[Legal Beagles]

The Post Office is considering introducing a basic current bank account in the wake of its successful tender to keep its card account.
The Post Office offers a savings account in conjunction with the Bank of Ireland, which would be seen as a natural contender to be a partner if the new venture gets off the ground. Post Office's parent company, Royal Mail, declined to comment yesterday.
This month the Post Office was awarded the successor to its card account, through which more than 4 million people are paid benefits and pensions. The account is vital to the Post Office. Not only does it earn revenue for the business but it brings in potential customers to the retail businesses that sit alongside sub-post offices. It also allows those collecting benefits and pensions to use the Post Office's branch network rather than having to visit high-street banks.
Introducing a basic bank account alongside the card account could make it cheaper for the Department for Work and Pensions to pay benefits while still allowing recipients to use the Post Office network.
A new current account would mark a further move in the Post Office's drive to increase the number of financial services it offers as it attempts to compensate for the loss of other work. It would help to underpin the network's social importance in rural and deprived urban areas.
The network is coming towards the end of a programme of 2,500 branch closures, leaving a network of about 11,500.

• UK banking sector
• Banks and building societies

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[Amethyst]

Re: Post Office may follow tender success with current account

Thats good news. If the post office do offer a basic current account then they have a good opportunity to get things right from the beginning.

Wonder if we can try influence the model. Between us we have a good idea what people want from a basic account.

If they can link it to the card account for those who have them they could use them as a bill management type system too. Enabling people to pay bills by DD and thus paying less whilst still being able to take out the cash you need. Also needs to be a no overdraft, no tranascations if theres no money there account with no charges. One charges for people on benefits can wipe out their food money for a week. If they have debit cards they need to be floor limitless so £5 transactions arent snuck through.

I would think the basic accounts would be aimed at people who currently have card accounts for pensions and benefits as a step up type account.

Sounds like its at early stages but a welcome move IMO. Just hope they get it right from the beginning.

[enaid]

Re: Post Office may follow tender success with current account

A new current account would mark a further move in the Post Office's drive to increase the number of financial services it offers as it attempts to compensate for the loss of other work. It would help to underpin the network's social importance in rural and deprived urban areas.

Is it me? or does the paragraph above mean they will be offering DD's and OD's to basic account holders.

[Amethyst]

Re: Post Office may follow tender success with current account

I hope they do allow DD's from the basic account but it needs to be done right. Also when you start working or coming off benefits you have no account to pay your wages into, and you may still be receiving benefits in your POCA, so would make the transfer from POCa to bank account to receive wages simpler.

[scoobydoo]

Re: Post Office may follow tender success with current account

I think if they did allow DD then in an ideal world if the money is not there

1) the dd would not be paid
2) The only charge would be for a letter to say not paid ( very low charge)
3) OR if there was good on line facilities they would make it clear from the begining it is up to the customer to check each month if the DD had gone out or there would be a message on line .

[EXC]

Re: Post Office may follow tender success with current account

http://business.timesonline.co.uk/to...cle5184678.ece





Post Office enters talks with the Bank of Ireland over unlimited guarantee account



The Post Office is in talks with the Bank of Ireland to offer a current account that would give customers an unlimited guarantee on deposits.

Ministers are under pressure to use the Post Office to create a public sector “people’s bank” that will provide basic financial services to those who most need them.
Royal Mail, which runs the Post Office, is understood to be in discussions with the Bank of Ireland, which already runs a number of its existing financial services.

The accounts look set to have an unlimited guarantee because the Irish Government has offered to underwrite all deposits in Irish banks.
Sources suggested that had the partnership been with a British bank, it would have been subject to the existing £50,000 guarantee.




The terms of the account, and whether it would offer more favourable terms than high street competitors, are yet to be decided.

The Post Office already has 1.8 million customers who use its financial services, including savings accounts, foreign currency and credit cards.Ministers are desperate to increase the use of Post Offices to prevent them from closing, particularly during the down-turn.
This comes the week after James Purnell, the Work and Pensions Secretary, announced that the Post Office would retain its £1 billion, five-year contract to distribute benefits to 4.3 million claimants.

On Monday, a report by Postcomm, the postal services regulator, called on Royal Mail Group and the Post Office to be run as separate businesses.

Peter Luff, the Tory chairman of the Business Select Committee, welcomed the banking move. He said: “This is very significant and very welcome indeed. It is exactly the kind of thing the management of Post Office Limited can do now the Government has ended the uncertainty over the Post Office Card Account. By developing a proper banking service Post Office Limited can both build a truly sustainable business and maintain vital services to remote and deprived communities.”

MPs of all parties have fought against the decline of the Post Office, particularly in rural areas, and some within the Labour party want the Post Office to offer an alternative to high street banks.

Jon Cruddas, the Labour MP, who has close links to the unions, said that ministers needed to help to create a “people’s bank”.

He said: “We need to go further in future – there are over two million people unable to get a bank account and they are going to increasingly feel the pinch from the credit crunch, extortionate credit card rates and rising bills.

“We need the Post Office to become the People’s Bank and the card account to become a real alternative to a bank account. That will not only help to secure the Post Office as a vital public service but also open up basic financial services to those who most need them. We need to show some real joined-up thinking.”

There have been signs of ministerial backing in recent days, with Lord Mandelson, the Business Secretary, throwing his weight behind the move.

He said in a letter to the Prime Minister: “We should examine the prospects for POL [Post Office Ltd] becoming a much more significant player in financial services – offering a wider range of attractive products within easy reach of the whole population, available from an institution they can trust.”