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Barclays to no longer allow cash withdrawals at UK Post Offices

U.K. lender Barclays is launching a new cashback scheme next year that allows people to withdraw money at small businesses in remote towns. The bank has also vowed not to close branches in remote areas, or where it is the last bank in town, for the next two years. 

But starting in January, Barclays customers in the U.K. will no longer be able to withdraw cash at the country's post offices. 

And that could pose problem for those who depend on cash the most.

In the U.K., many people in rural areas where there is no bank branch or nearby free-to-use ATM rely on the country's post offices to access cash. Last year, Britain's 11,500 post office branches handled more than 130 million transactions for U.K. banks.

The Post Office recently announced a three-year agreement with 28 banks and building societies, which allowed for postmasters and post mistresses to be paid more to take in and dispense cash. Barclays was the only one to omit cash withdrawals from its part of the agreement.

The Post Office said it was "disappointed" with Barclay's decision. 

In 2017, the Post Office and the major U.K. high street banks entered into an industry-wide agreement enabling anyone with a U.K. bank account to undertake a wide range of banking transactions at post offices to ensure individuals and business across the country have access to convenient, local banking facilities.

Barclays' move is generating an outcry from industry groups who support free and easy access to cash in the country. 

According to the BBC, Natalie Ceeney, chair of the Access to Cash Review, wrote that Barclays' customers make 1.2 million cash withdrawals from post offices every month. She is calling on Barclays to reverse its plan. "The cash system that supports them must be cherished, not undermined," she said.

After Jan. 8, Barclays customers will still be able to continue to deposit cash and checks and access change and balance inquiries at Post Office branches as these services will remain unaffected by Barclays' decision, the Post Office said. 

Meanwhile, Barclays maintains that nearly all of its customers who use the Post Office live in areas where they can easily access a branch or free-to-use cash machine.