By Alex Mitchell in Sydney

Commonwealth Bank’s panned and then postponed call to slug some customers to access their own money has been labelled another attempt to shift people online.

Australia’s largest bank on Wednesday paused a controversial move to shift all “Complete Access” customers to “Smart Access” accounts, which included a $3 “assisted withdrawal fee”.

The charge hits customers when they take cash out from bank branches, post offices or over the phone but does not include withdrawals from ATMs.

However, after a near-24-hour bashing from all sides of politics, the bank’s head of retail services Angus Sullivan announced a temporary reversal of the charge for those likely to take a hip-pocket hit.

For the estimated 100,000 customers who would have been worse off, the bank would not enforce the change for at least the next six months.

Mr Sullivan admitted the bank butchered the announcement, adding the majority of those moving accounts would have been in a better position.

“Just under 90 per cent would have been better off moving to the Smart Access account, which has a lower monthly fee, but … it does have an assisted withdrawal fee,” he told Sydney radio 2GB.

“We’re going to continue to move those customers across … for those customers who might have been in a worse position, we’re pausing the migration and we’re going to contact all of those customers.”

Age, service and disability pensioners, customers aged under 18 and people with disabilities that require them to use branches would already have the fee waived.

It is also waived if more than $2000 is deposited into the account in a month.

Treasurer Jim Chalmers said he spoke with the bank’s chief executive, Matt Comyn, before the decision was made public, adding that the flagged proposal was “not acceptable or appropriate”.

“We are talking in lots of instances about some of the most vulnerable people in the banking system,” he said.

“I welcome the change of heart.”

But Swinburne payment systems expert  Steve Worthington said the bank’s attempt was in line with a wider industry push towards online services.

“We are seeing less and less branches – some of whom do not carry cash at all – shorter branch opening hours and less ATMs,” he said.

“Commonwealth’s introduction of fees for customers to access cash in their branches is just another brick in the wall of the banks driving their customers to use digital banking.”

Prominent politicians had spent the morning bashing the flagged change.

Labor frontbencher Clare O’Neil said the proposal was a “kick in the guts” to people struggling financially.

“Everyone’s had a bit of a tough year on the cost-of-living front  … come on guys, it’s Christmas, we don’t need this right now,” she said.

Liberal senator Jane Hume even pledged to close her own Commonwealth Bank account in protest.

“I don’t know whether it’s a Complete Access account or not (but) it’s a bad decision and I will be shutting my account,” she said.

The government recently announced a proposed mandate for businesses like supermarkets, pharmacies and petrol stations that sell essential items to accept cash payments.

About 94 per cent of businesses accept cash, but the figure is down from 99 per cent before the COVID-19 pandemic.

An earlier Senate inquiry into the shutting of bank branches across rural Australia recommended a regulator be given the power to veto planned closures.