The ongoing closure of rural bank and post office branches is reminiscent of scenes from John Healy's No One Shouted Stop! - originally a series of Irish Times articles called Death of An Irish Town. The reporter detailed the slow disappearance of his childhood town, Charlestown, Co Mayo, and its businesses, due to emigration.

Of post-second World War rural Ireland, Mr Healy said people were blinded to the future because ". . . the heaps of money stacked away in the Post Office and below in the town's only bank and under a thousand rich mattresses left us without an eyesight . . ."

Today, small towns and villages are losing their financial infrastructure in the biggest boomtime in the Republic's history for altogether different reasons. Despite technology allowing workers new mobility and flexibility, "rural renewal" is not occurring at the pace once expected by the Government and its citizens.

The threat of rural post office closures in the early 1990s caused a groundswell of opposition from communities which claimed the closures would devastate their towns and villages. Now small communities are up in arms again, this time over the withdrawal of banking facilities, which is happening quietly and continuously.

Banks are "rationalising" smaller branches to protect their shrinking profit margins due to shareholder pressure, new competition, technology and, possibly, DIRT bills.

Post offices outside major cities are not as profitable as they once were and some branches are closing once the postmaster or mistress retires or dies. However, An Post says difficulty finding replacement staff has led to the closure of only three or four small rural post offices over the past 18 months.

Questions about the viability of An Post's 1,911 post offices throughout the State have long been on the political agenda. The company's stance has been that it will operate within the confines of the Government's no closure policy. However, it regards many of the smaller sub-offices as unsustainable. Some 911 of the subpost offices generate just 5 per cent of An Post's turnover.

It will be increasingly difficult for urban post offices to subsidise the rural network as the profits from larger outlets are falling.

Vision of the future:

If current negotiations become reality, the future may see an automated teller machine (ATM) in or near every small town and village rather than a bank. The banking sector and An Post are in talks on the development of a universal account aimed at the 30 per cent of the population that does not hold a bank account.

Discussions last week centred on a system allowing consumers access to their social welfare, pensions' benefits or salary using a plastic card and the existing electronic payments network.

The card would reduce the need to carry cash and could address the security concerns of elderly residents and local shopkeepers. But there are fears that it could facilitate further bank branch closures.

Banking on a smart card:

The universal account card would effectively be a "smart card", acting as both a debit and cash withdrawal instrument. Consumers could use it to pay for groceries, utilities and other bills. As with the existing Laser card system, they could ask for cash back during any of these transactions. Actual currency may be obtained using an ATM.

The account would be virtual - not attached to a particular bricks and mortar bank - and would be available to everyone in the Republic, regardless of income or location. The universal account was proposed to Government by the Irish Payments System Organisation, which represents the banking sector, as part of the national payment strategy last December.

Universal bank accounts do not have overdraft facilities or charges and would therefore operate at a loss. However, banks and the Government stand to benefit from the system as a reduction in paper-based transactions lowers costs and increases efficiency.

Posting results:

Whether An Post will profit from this arrangement - if it chooses to participate - is anyone's guess. Approximately 1,000 Serviceplus post offices already provide computerised transactions and bill payment services to customers throughout the State.

More than 40 per cent of all transactions occurring in a post office are social welfare and pension related, said An Post's Mr Declan Byrne. Although the post office has serious reservations about the proposed universal account system, an increase in transactions may provide a financial cushion against future competition.

Loss of the social welfare contract would significantly affect An Post's bottom line, as the account generates more than £35 million (€44 million) in fees a year.

Searching for a solution:

Three weeks ago, the Minister for Public Enterprise, Ms O'Rourke, signalled Government support for the post office/ bank alliance in the Dail. "The Cabinet has taken an informal government decision to seek meetings with the banks to ascertain how some of the services they are abrogating in favour of moving to more central locations can be transferred to the post office network," she said.

However, communities affected by the withdrawal of banking and postal services may not be convinced that technology alone is an acceptable substitute for person-to-person services. Talks between An Post and the banks are in the early stages and the social partners have yet to meet concerning this matter under the agreement in the Programme for Prosperity and Fairness (PPF).

However, an amicable decision on the electronic payments system between the banks, An Post and the Government may be a win-win situation for consumers if their needs are put first by decision-makers.