Barclays has reversed its decision to stop the bank’s customers from making cash withdrawals from the Post Office just two weeks after it announced the move.

The company now says it will continue to allow customers to use their debit cards to take cash out over Post Office counters “for the next three years”.

The banking group faced widespread criticism and expressions of dismay from parliament, regulators, campaigners and the Post Office itself after announcing that from 8 January 2020, customers would no longer be able to withdraw cash from the Post Office using the cards.

Its decision to scrap the service came at a time of rising concern about the demise of bank branches and free-to-use ATMs, particularly – but not exclusively – from within rural communities.

In a statement on Thursday evening, Barclays acknowledged its decision had “provoked a great deal of public and private debate”.

“We have listened very carefully to points that have been made to us by ministers in the Government, by MPs, and by interested charities and consumer advocates.

“Ultimately we have been persuaded to rethink our proposals by the argument that our full participation in the Post Office Banking Framework is crucial at this point to the viability of the Post Office network.”

The bank added that although it had “concerns” about how it would be able continue the model long-term, it recognised the Post Office as “a network valued by many communities in the UK today”.

Barclays said it wanted to work with the government and others to address problems “inherent” in the cash-over-the-counter model.

“So we have amended our position, and will now maintain a full service proposition in the Post Office for our customers, including cash withdrawals using a debit card, for the next three years.”

A Barclays spokesperson insisted on Thursday that customers will continue to be able to access their cash over Post Office counters free of charge.

Barclays rejoins 28 other banks signed up to carry on with the arrangement for access cash and cheque banking services through the branches until 2022.

Barclays UK chief executive Matt Hammerstein and representatives from the Post Office and consumer campaigner Which? were due to give evidence to the parliamentary Business, Energy and Industrial Strategy (BEIS) Committee on 6 November.

It is part of the MPs’ inquiry into the future of the Post Office network, which has become increasingly important in plugging the gaps left by bank branch closures.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy (BEIS) committee, said: “Barclays have finally read the writing on the wall and caved to public and political pressure to dump this woefully misguided policy.

“I met with Barclays yesterday and as a committee we were very keen that they should face proper public scrutiny for their actions.

“The BEIS committee has called out this egregious behaviour towards customers and we welcome the fact that Barclays has belatedly realised the game is up on this policy.”

Natalie Ceeney, independent chair of the Access to Cash Review, a body set up to consider consumers’ cash requirements over the next five to 15 years, said: “I’m glad Barclays have come to this decision. They have listened to concerns of politicians, charities and most importantly, their customers. Well done to them.

“Lessons need to be learnt by government. The cash infrastructure is fragile and cannot be left solely to commercial interests.

“We must now introduce a cash guarantee, which makes sure the system is resilient and available for people as long as they need it.”

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