Guardian.co.uk

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.