The survival of the country's remaining sub-post offices could be reliant on them continuing to process social welfare payments, according to the president of the Irish Postmasters' Union (IPU).
Speaking at the IPU annual conference yesterday, Joe McArdle, a postmaster in Co Louth, said "the actions of the Government in encouraging more and more social welfare claimants to divert their payments into bank accounts through electronic fund transfers is threatening the future viability of the post office network".
He welcomed an An Post agreement to process Garda fines, and said the possible creation of a new banking operation with Belgian bank Fortis "has the potential to be a major shot in the arm for the post office network".
"Discussions are ongoing between An Post and Fortis, the Belgian bank, to create a new banking operation for APFS (An Post Financial Services).
"If these discussions are successfully concluded it will enable the local post office to provide customers with a current bank account and access to a whole range of financial products, including loans and insurance.
"It is hoped that this banking operation can commence in early 2007."
He added: "However, time is of the essence and no effort must be spared in getting the operation up and running, and to ensure that the financial products to be made available are both attractive and competitive."
He also pressed the Government on how it could aid the survival of a vital part of rural life.
"Commercial viability for post offices in some remote communities is practically impossible.
"It is our view that the Government must recognise this reality and practically address it by way of the introduction of Public Service Obligation (PSO)."
To do so would legally oblige the Government to support it as it does other vital public services such as schools and hospitals.
"This, in our view, is the most appropriate way of dealing with the preservation of the valuable service of the local post office in the more remote communities and ensuring the future of a viable network."
Mr McArdle added: "Equally critical to the survival of the whole post office network is the retention of as much of the Department of Social and Family Affairs social welfare contract as is possible.
"This contract is currently under threat from a number of sources, not the least of which is the outcome of a European Court decision and a disposition on the part of the Department of Social and Family Affairs to push more and more of the payments to the banking route by electronic funds transfer.
"Both the social welfare claimants and the post office are the losers in this development, and we call on the Department of Social and Family Affairs to take a more pragmatic view at the very least until the question of An Post being able to provide its own banking facility later this year is resolved."