Letter: PO current account was way ahead of the field.

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Letter: Post Office current account was way ahead of the field

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There is talk of the Post Office introducing a bank current account. It has been tried, and was so successful it was privatised.

Giro Bank was established in 1968, 45 years ago. It was the first computerised bank, the first to adopt OCR, (Optical Character Recognition), the first to offer free banking, beating the much vaunted First Direct by many years.

Giro Bank’s system was based, not on cheques, but on direct transfers between accounts, beating the old cheque clearing system by many days (and still does).

In the early 60s the majority of the population was paid in cash, did not have bank accounts and labelled by the banking system as unprofitable.

There were 22,000 Post Offices then compared to 3,000 banks. The banks kept their tariffs secret, Giro Bank’s were published, the main one being free transfers between accounts – it revolutionised banking in Britain.

Giro was not an instant success, it struggled before it attained the utilities – electricity, gas, etc – the government’s welfare payments service, supermarkets and service stations. By the late 70s one in every three pounds deposited in Britain was into Giro Bank via the Post Office, it also introduced ATMs to the country.

Its only drawback was the fact that the term ‘Giro cheque’ became synonymous with welfare payments, causing a serious snob factor.

The government reacted to the success of Giro Bank and the adverse reaction of the normal High Street banks by selling it to Alliance and Leicester for £1 (now Santander), whose first action was to stop the free postage due to ‘customer demand’.

Bob Wydell

Oswestry