Irish customers are now able to do all of their banking straight from their local post office after a new current account has been revealed from Postbank. Approximately a thousand post offices will be hosting the new way to bank by the end of the summer. This move is set up to place competitive pressure on the leading banks in the market.
People are already able to invest money into, save, and take out forms of insurance through the post office, and plans to offer mortgages and various credit card products are under way for the next big move. The new product of Postbank is expected to help save the failing post offices in more rural areas.
An Post and Fortis, the financial giant of Benelux, joined together to create Postbank. It was announced on Monday 12th May that the new current account service is already available right now in 270 post offices, but this will have expanded further by the end of August, to over 1000 post office branches.
A current account is a basic banking service that allows people to pay money and receive money, to use cheque books and debit cards, and to generally manage their personal finances. Currently, there are only six banks in Ireland that offer consumers current accounts. They are AIB, Ulster, National Irish, Band of Ireland, Halifax and Permanent TSB. The move of the post office introducing current accounts is likely to pressurize these retail banks.
The current account that is new from Postbank is called the Everyday Account. It is going to offer banking free of charge to its customers, providing they remain in credit. No charges are going to be made for standing orders or direct debits, and there are going to be no quarterly fees, that many of the leading banks charge for the use of their current account services.
There will be an overdraft rate that is competitive to the big banks; this will be 12pc, and an extra 6pb will be charged for “unauthorized overdrafts” – i.e. when customers become overdrawn on top of their agreed overdraft limit. This charge is cheaper than Permanent TSB, Bank of Ireland and AIB, but Halifax, Ulster and National Irish Bank offer a lower rate to their customers.
All customers signing up for the Postbank current account through the post office will be given a Maestro debit card, which can be used to make payments in the vast majority of stores, as well for online shopping. Postbank are also going to introduce an online banking service.
Postbank, which was launched last year to offer savings accounts, insurance and investment products, already has over 100 thousand customers. It is hoped that many of these will want to extend their accounts to have a current account as well. Postbank now plans to integrate One Direct into its offered services, which is an existing An Post financial service. Postpoint, which is An Post’s electronic payment system, is also going to be a big part of Postbank.
Postbank is going to extend even further in the next few months and plans to offer credit cards and personal loans. The move to offer mortgages to customers is also being strongly thought about. It was suggested that post office banking would only appeal to a demographic of older people who already use the post office to collect their pensions.
The Postbank executive dismissed this criticism, saying that existing customers were on average around their mid 40’s.
The announcement from Postbank came just in time, as postmasters were planning to develop an alliance with major social organizations, and campaign for protection for the future of post offices. Postbank should breathe life back into small rural post offices. The post office network was said to be in a period of serious decline, according to officials of the Irish Postmaster’s Union. 500 post offices have been closed in the last eight years, leaving a national total of 1200 offices.