The company has 170 branches across the Republic of Ireland, 22 of which are already cashless.
A bank spokesman said the original decision was taken in the context of the evolving banking environment and the opportunity to enhance its long-standing relationship with An Post.
“In recent years there has been a dramatic increase in the use of digital banking services and a decline in branch visits and cash usage,” he said.
“In AIB’s case, there are 2.9m daily digital interactions compared with 35,000 customer branch visits.
“There has been a 36% decline in cash withdrawals from ATMs and a 50% fall in cheque usage over the past five years.”
The bank has seen a fall of almost 50% in branch over-the-counter teller transactions.
Mobile and online payments have increased by 85% in that same timeframe.
“The bank continues to retain its 170-strong branch network in its entirety and will also continue to offer banking services through its relationship with at An Post at its 920 post offices nationwide,” the bank added.
Irish Minister for Finance Paschal Donohoe said he welcomed AIB’s decision not to go ahead with the proposed changes.
In a statement, he said that banks have “a key role in maintaining the flow of cash through the economy and ensuring appropriate access to retail banking services for all in society, including the vulnerable.”
In a statement, before AIB’s reversal, the regulator said that it expected banks to consider carefully the impact of its decisions, with a consumer-focused approach.
