Cash Payments’ lets online retailers offer customers the option of paying by cash — whilst also providing quick and automatic assurance that goods have been paid for before they are despatched.
Read MoreThe Post Office Card Account contract is seen as a lifeline for many branches and cannot be used in other banks or shops.
Read MoreGordon Brown has been warned at least 3,000 more post offices may shut if Royal Mail loses a vital GBP 200million Government contract.
It is feared a new five-year contract to run the post office card account may be taken away from Royal Mail and awarded to rival bidder PayPoint.
George Thomson, general secretary of the National Federation of Sub-Postmasters, has written to Mr Brown to warn that losing the contract will be a disaster for his members, who get up to 20 per cent of their income from the card.
And he also predicted up to 3,000 post offices may be forced to shut – on top of the 2,500 already being axed under streamlining plans.
Around GBP 2 billion of that money is then spent in stores attached to post offices.
The federation is traditionally a very moderate organisation which supported the current closure programme because it agreed there was not enough work to support the existing of 12,000 post offices.
But Mr Thomson says the prospect of losing another one in four branches would be devastating. It would mean the elderly those on benefits having to travel long distances to get their money.
Mr Thomson said the public will see the decision on who gets the card account as a “test of the Government’s faith” in the future of our post offices.
The decision on the contract will be announced in the next few weeks.
Virgin Money today entered the pre-paid card market with the launch of its Pay As You Go card.
The card is aimed at the three million people who do not have a bank account, and migrant workers, who can use it to send money home to their families.
The card works in a similar way to pay-as-you-go mobile phones, with people able to top up their card with money at Post Offices, PayPoint outlets and online.
Once money has been put on to the card it can be used to pay for things wherever MasterCard is accepted, as well as to buy things online and to withdraw cash from ATMs.
The cards can also be used by parents with children aged 13, with an online statement enabling them to monitor their children’s spending, and by people travelling abroad.
The cards cost GBP 9.95 to take out, with additional cards charged at £4.95. Money can be loaded on to the cards free at the Post Office or online but there is a 2.75% charge for using PayPoint and a 2.5% charge if a credit card is used.
People can use the cards to send money abroad by purchasing an addition card and sending it to their family. They can then load their card with cash in the UK and their family can withdraw it from an ATM abroad, although they will incur a 3.5% fee.
Cardholders will receive a 10% discount on goods and services from other members of the Virgin group, such as Virgin Megastores, Virgin Holidays and Virgin Wines.
Jayne-Anne Gadhia, chief executive of Virgin Money, said: “Almost three million adults in the UK do not use banking facilities and are locked in the cash economy.
“This card will allow users to buy on the internet, on the high street, and save money on a range of Virgin products.”
Read MoreRoyal Mail, which has been haemorrhaging postal contracts to private sector competitors, faces a fresh challenge to its business with a bid from PayPoint, the payment terminal network, to take over many of the services provided by post offices.
PayPoint, which has taken over the collection of television licence fees from the Post Office, has a bigger network of outlets, which are open longer hours and could process much of the business handled by post offices.
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