Post offices could survive and thrive if they were to diversify into other areas such as providing financial services and collecting local authority payments, according to a new report.

The study, which was carried out by the Post Office Network Business Development Group, has found that most post offices are seriously underutilised with 66 per cent of all transactions occurring in just 300 of the country's 1,140 post offices.

Overall, 48 per cent of all post offices in Ireland account for just 12 per cent of business activities carried out at post offices.

According to the study, Department of Social Welfare payments account for 35 per cent of all transactions carried out across post offices, followed by postal-related activities at 26.7 per cent. Billpay accounted for 14.9 per cent of activity, while savings/banking for 13.1 per cent of transactions.

The Post Office Network Business Development Group, which is led by entrepreneur Bobby Kerr, was established earlier this year to explore commercial and public service opportunities.

It has called for post offices to diversity and modernise to provide more services that will attract customers.

The group’s report identifies several opportunities including developing an increased capability in financial services, an enhanced role in the delivery of government services and the development of e-payments accounts.

An Post is one of Ireland's largest indigenous commercial enterprises, both in terms of turnover and employment. In 2014, the organisation had a turnover of €820 million with over 14,000 people employed across the postal system, including employees of An Post and contracted post offices.

Despite the challenges faced by post offices, the number of closures has fallen dramatically in recent years with just 24 net closures between 2011 and 2014, compared to 198 between 2007 and 2010.