Post offices will be allowed to accept credit cards for the first time in selling foreign currency. Commission will be charged at 1 per cent and the minimum fee will be £2.50.
Richard Dykes, managing director of the Post Office, said the aim was to take a significant slice of the £21bn foreign exchange market, serving over 5 million customers a year by the end of the decade.
"Our foreign currency exchange service is one of the best deals on the high street. It could not be easier for the 28 million customers we serve each week to buy their holiday spending money when they visit the post office," he said.
Customers can buy currency and travellers cheques over the counter at 600 post offices and order them at the other 18,000. Only a few tiny community outlets will be excluded.
The Post Office also plans to offer travel insurance in a trial starting next month and is examining other insurance opportunities with the help of Sun Alliance. The future of the post office networks is viewed as increasingly dependent on expanding the range of services on offer.
Agreement has been reached with British Gas to allow customers to pay bills at post offices. Since January, gas customers have been unable to pay bills at British Gas showrooms.
A Post Office spokesman said: "We have a unique network, the largest chain of retail outlets in Europe and a natural outlet for these products."