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2019-10-09 16:36:00

Barclays customers will no longer be allowed to withdraw cash at post offices, though they will still be able to make deposits, BBC reports. The decision is part of an agreement that The Post Office unveiled with 28 banks and building societies allowing postmasters and post mistresses to be paid more for accepting deposits and dispensing withdrawals for the three years, which started this past January. The Payment Systems Regulator — which oversees the cash system — warned that it's concerned about the impact of the decision.

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Further limitations to consumer access points to cash are problematic in the UK, as ATMs and bank branches are disappearing. Between January 2015 and August 2019, the UK saw a staggering 3,303 bank branch closures, equivalent to 34% of the overall branch network in the country. And to make matters worse, approximately 3,000 cash machines disappeared in the UK in the last six months alone, while an additional 1,250 ATMs switched to charging a fee in March 2019.

This drastic contraction in standard cash access points combined with Barclays' decision to not offer withdrawals from post offices is bad news for Barclays customers, especially since they have relied steadily on post office withdrawals, making 1.2 million of them every month, according to an Access to Cash Review cited by BBC.

Barclays is offsetting the decision with alternatives that it deems more efficient. Rather than offer withdrawals at post offices, Barclays says it will launch a cash-back scheme at small businesses in areas where no branch or ATM alternatives are available to customers within 1km (.62 miles). It has also pledged to not close remote or last-in-town branches for the next two years. Pushing for cash-back options at retailers is not a new strategy for increasing cash access — Mastercard recently announced an initiative in the UK that will see it incentivize retailers to offer cash back — but it remains to be seen if it will effectively counteract the widespread shrinkage of branches and ATMs.

Rolling out its cash back alternative to a wide array of retailers quickly and publicizing it successfully will be key for Barclays. If the bank can get enough retailers onboard with its cash-back plan, and that idea does turn out to be more efficient than working with post offices, it could cut down on costs that other banks remain saddled with. However, if its cash-back plan doesn't offer adequate coverage, doesn't roll out quickly enough, or consumers aren't made aware that it's available, Barclays' more cash-dependent customers may feel a pinch and the bank may risk losing those consumers if they opt to do their banking with a competitor offering easier access to cash.

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businessinsider.com Gregory Magana
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