The Department for Work and Pensions (DWP) has committed to closing the Post Office Card Account (POca) service. We speak to Post Office’s Head of POca, Ross Borkett, about why it’s important that we work together to help support our elderly and vulnerable customers, and make sure they can continue to access cash at your branch.
Why are you putting the focus on converting POca customers to an alternative account now?
DWP plans to close POca as early as November 2021, and, for the past three years, they have been contacting customers who can open an alternative account to tell them that they must do so. DWP will continue to encourage POca customers to move to an alternative account even if we don’t. In DWP’s view, they believe that the taxpayer should only be funding an exception service for those who cannot open a bank account.
Our focus is on maintain existing POca customers as Post Office customers. With your help, we believe we can retain a lot of our existing POca business under our Banking Framework. We encourage you to talk to your POca customers when they come in to transact to remind them that they can have their government payments made into a bank account, and that they can still withdraw money in your branch. They should not ignore letters they receive from the DWP.
Engaging with your POca customers will increase your chances of retaining their business. Not engaging with them early enough risks losing their custom. We know from our experience to date that when Postmasters actively engage with their POca customers they are far more likely to return to their local branch to access their cash in the future.
POca remuneration is higher than the remuneration for Banking Framework withdrawals, so what’s the incentive to Postmasters?
We recognise that remuneration is different, but it is important to remember that your POca renumeration covers more services than just a POca withdrawal. This is why it is higher than a banking withdrawal. The incentive is to keep helping and serving the most vulnerable in your communities, and, by making sure POca customers can continue to withdraw cash at your branch, you can maintain your footfall and remuneration as a result. DWP will be migrating customers to their new product as soon as it is available, and this will be before the end of the contract.
At this stage we don’t know if the replacement service will be available in the Post Office, so we risk losing those customers’ business who have not converted to an account which is accessible in the Post Office. We believe that Postmasters will benefit in the medium to long term by encouraging POca customers to move to an alternative account and retain their custom under banking.
What is Post Office doing to help Postmasters and branches with this?
Post Office will continue to support you with your efforts every step of the way. We have already produced guidance for Postmasters about engaging your POca customers and we will continue to publish regular updates and provide you with information about this on One and Branch Focus.
We will be making a POca information leaflet, which is currently being trialled in 1,000 branches, available to the entire network in January 2021. Your Area Managers can also support you, so, if you need more help, they will have the answers or know who to speak with in order to get them.
In addition, as part of your conversations, you can also provide POca customers with our Everyday Banking leaflet. This will help with informing them that you offer access to almost all UK bank accounts, as well as building society and credit union accounts.
How are we supposed to have these conversations with POca customers when we cannot give financial advice?
You’re right that we cannot give financial advice, but we can inform customers of the Banking Framework services Post Office offers. As long as you do not recommend one account over another you will be compliant. You can also signpost customers to where they can get advice, such as through the Money Advice Service. Contact details are included in the leaflets we are distributing.
If a customer isn’t sure what to do, they can also speak to DWP about their options for receiving their payments.
POca isn’t due to end until late next year, so why do we need to do this now?
DWP plan to phase in the migration of customers on to their new product from early 2021, starting with those vulnerable customers who are unable to convert, and then move on to those customers who have yet to respond to their letters.
Acting now creates our best opportunity to retain as much business as possible. Do not delay your conversations. Make sure that as many of your POca customers as possible are aware that it is very simple to switch their payments and continue to use your branch. The only way to make sure customers continue to use Post Office is to move their pension and benefits payments to an account that we service through the Banking Framework as soon as they can.
If Postmasters can take one thing away from this article, what would you like it to be?
Time is running out. We need to work together to make sure that your POca customers today are still Post Office customers tomorrow.
You have built a relationship with your POca customers over many years and know them better than we do. Thank you for all your efforts and I really do appreciate your ongoing support. This is about helping us to help you – moving POca customers to an account that we service through the Post Office Banking Framework will help to provide long term custom beyond the end of our contract with DWP.
You can find out more on Branch Focus about moving POca customers to a new account, including downloading the Postmaster information pack and POca information leaflet.