Universal Bank widens net on funding

Utilities firms and standalone internet banks could be forced by the government to contribute to the financing of the Post Office's Universal Bank.

Utilities firms and standalone internet banks could be forced by the government to contribute to the financing of the Post Office's Universal Bank.

The system is understood to be under consideration in a bid to spread Universal Bank subsidies more evenly and appease concern from high street banks about the cost of the operation.

Officials at the Department of Trade and Industry are due to issue an official response to the Post Office's proposals for the future of the network in the run-up to Christmas.

It had previously been thought that only the high street banks would be asked to contribute to the Universal Bank's running costs, which are expected to be up to pounds 150m a year. But a Department of Trade and Industry spokeswoman refused to rule out the net being cast wider.

'The Post Office is talking to parties that have an interest in the operation of the Universal Bank,' she said. 'At the moment, that means the high street banks, but no final decision has been taken on who will be asked to contribute. The issue of utilities firms and bill payments is a matter for the Post Office.'

A Post Office spokeswoman said: 'We expect the government's response by the end of the year. We cannot comment on whether that will include other firms in the financial services or utilities sectors.'

The Post Office is still formulating branding plans for its flagship financial service product, after concerns were raised about the original name, Clear, by rivals in the sector (Marketing, November 16).

The Universal Bank will offer direct debit and basic banking facilities to customers unable to open an account with high street providers.


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