3,000 Post Offices face closure if the Government awards the Post Office Card Account 2 (Poca2) contract - which handles pensions and benefits - to a rival company, according to the National Federation of Sub-Postmasters (NFSP).
Poca2 provides 12 per cent of sub-postmasters' earnings, and comprise 6.5 million of the 24 million visits made by customers each week.
Two rival bidders (one thought to be PayPoint) are competing for Poca2. If the Post Office loses the contract, says the NFSP, it will force many Post Offices to close - on top of the existing plans to close around 2,500 Post Offices.
George Thomson, general secretary of the NFSP, said: 'If the Government fails to award the post office card account contract to the Post Office, the effect will be catastrophic.
'Millions of pensioners and those on benefits choose to pick up their money at the post office. This is what keeps so many sub-postmasters in business.'
Mr Thomson addresses the NFSP's annual conference in Torquay today, and will be raising this matter.
The Department for Business, Enterprise and Regulatory Reform (BERR) said: 'There are a number of bank and current accounts which people can access at post offices.
'People who choose to have their pension or benefit paid into a bank account can still access it through the Post Office.'
Which firm gets the Poca2 contract will be decided this summer, but, if the Post Office does lose the contract, 3,000 Post Offices face closure, according to the National Federation of Sub-Postmasters (NFSP).
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