The Post Office agreed a three-year, industry-wide agreement known as the Banking Framework in January 2017. This agreement allows 95% of business and 99% of personal banking customers to access their account at post offices and marked the largest expansion of face-to-face banking in a generation, allowing communities and businesses to withdraw money, deposit cash and cheques and check balances at 11,500 Post Office branches in the UK. The volume of basic banking transactions undertaken at Post Offices has steadily increased since the introduction of the Banking Framework, with close to 130 million transactions in 2018.
The Post Office has recently renegotiated the commercial terms and service enhancements for Banking Framework 2, which will take effect from January 2020. Under the new agreement, there will be a significant increase to the fees that the Post Office will receive from the banks for processing transactions. The Post Office’s overall income through Banking Framework 2 will only increase further as transaction volumes continue to grow.
HM Treasury is very supportive of the agreement and recognises fully its role in providing continued access to over-the-counter banking services for customers across the country, particularly when a bank branch closes. However, these are commercial matters for the banks and the Post Office and they require full commercial freedom to consider what, if any, further banking services might be feasible to offer through the Post Office network.