Millions of pensioners and unemployed people will have to open a bank account for the first time under a new scheme being launched on Tuesday.
Claimants will still have to visit the Post Office
Ministers claim universal banking will help the financially excluded gain a foothold in society.
It will also allow the government to pay social security benefits electronically, rather than by giro cheque.
The government wants to convert all 14 million benefit recipients to the new system by 2005.
People without a bank account will have to open a special Post Office account for their benefits to be paid into.
However, they will still have to go to their local post office to collect the cash.
The accounts have been criticised by some within the banking industry, because they do not have direct debit, cash card or overdraft facilities.
But benefit recipients will also be given the option of opening a no-frills bank account with one of 12 banks that have signed up to the scheme.
Several, such as Barclays and Royal Bank of Scotland, already have basic card accounts for people with bad credit histories.
These allow people to set up direct debits but do not have an overdraft facility.
From this week people will be able to access these accounts through Post Offices, as part of the universal banking scheme.
The government estimates that up to three million people in the UK do not have a bank account.
Having an account helps the long-term unemployed and others on the bottom rung of society become "work ready", a spokesman for the Department of Work and Pensions said.
It also allows them to save cash on utility bills by setting up direct debits.
So far only a few hundred out of the 1.3 million benefit recipients contacted have signed up to the universal banking system.
Britain's banks have paid £180m to be part of the new account scheme, after coming under pressure from goverment to do more to help the poor.
But the scheme has come under fire for some within the banking industry for being too complicated.
Lack of demand?
Banks have also questioned whether there is any demand for bank accounts from people who do not already have one.
According to press reports, of the 1.3 million benefit recipients contacted so far, only 100,000 have asked to open the new accounts.
About 500,000 say they already have bank accounts.
A spokesman for the British Bankers' Association said it was "up to the market to decide" how many people opted for a basic bank account over a Post Office account.
But he said the industry was "in no doubt" that the direct payment scheme would work.