News

Digital-only bank enters talks with the Post Office

08 February 2019

Digital-only bank Monzo has told MPs it has entered discussions with the Post Office to allow customers to deposit and withdraw cash in its branches.

Tom Blomfield, chief executive of the start-up, which has no branches of its own, told the Treasury Select Committee yesterday that cash transactions were not 'going away'. 

It comes as cash-use continues to fall, with card payments - especially contactless ones - rising rapidly.  

Under the arrangement, the Post Office would offer Monzo customers a service to pay in cash for a small fee.

Blomfield said: 'For the vast majority of other services, our customers prefer to use a mobile app which is open 24 hours a day.'

Fellow smartphone bank Starling already inked a deal with the Post Office in November last year, enabling its customers to deposit cash and cheques in any of the PO's 11,500 UK branches.

In the same committee hearing, the banking director of the Post Office Martin Kearsley told MPs that it was in discussion with UK banks to renegotiate the service it offers them, revealing it lost money on it.

The Post Office processed 130million transactions last year for cash withdrawals and deposits; Kearsley told MPs that the service was not profitable, but added 'we are in discussions with banks to change that position.

'If you put the entire cost of supporting our cash infrastructure related to the banking agreement that we've got, it is not profitable.'