After 130 years, the Bank of New Zealand is closing its Pahiatua branch on September 7, close on the heels of the closure of the ANZ Bank in the town last December.

Changing customer needs in Pahiatua has led to the decision to close the BNZ branch in the town, but the BNZ will continue to support the community's banking needs by keeping an ATM located on Main St for deposits and withdrawals.

Pahiatua businesswoman and Tararua District councillor Alison Franklin told the Dannevirke News that sadly the closure is a "sign of the times".

"I'm not shocked, but disappointed. This is just another blow for a small community like ours," she said.

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Franklin and her husband Graeme own the Blackstump Bar and Cafe and Harrows Restaurant in Pahiatua and bank with the BNZ, but she said they know full well only 4 per cent of their takings go through their till as cash.

And it's a reality for the BNZ, retail regional manager Ange McHardy said.

"More and more of our customers are choosing to do their banking online. In fact nationwide 89 per cent of our transactions are completed by customers using our digital services and our Pahiatua customers are no different," she said.

"The reality is that in the last couple of years, the decline in transactions taking place in the store has been significant."

However, Franklin said she feels for the elderly and those living in isolated, rural areas.

"With the lack of connectivity, online banking is difficult," she said. "But we're heading towards a cashless society."

Pahiatua's Shirley Hull, a Tararua District councillor, said the BNZ had been an important institution in Pahiatua and was well used by Woodville and Eketahuna residents as well as through traffic.

"Folk who transferred accounts to the BNZ when the ANZ shut will be feeling slighted," she said.

"I know the story line from the bank was that it was under-utilised, but very short hours would account for some of that. I visited the bank during what I would deem acceptable banking hours, only to find it closed for lunch, a time many would visit."

Hull said she understood the impact of online services.

"But I very recently visited the BNZ because the service required physical attendance," she said. "I presume in the future the bank is expecting community folk to travel to Masterton, Palmerston North or Dannevirke."

Hull said she sees the remedy for bank closures as a combined service, corporate banking, one facility with access to all banks.

"Banks will have to work collaboratively like most modern services nowadays," she said.

Meanwhile, McHardy paid tribute to BNZ's Pahiatua staff who have supported their customers over the years, especially since the reduction in store hours in December 2016.

"Our two Pahiatua staff are considering redeployment in the region," she said.

Franklin also said she felt for the staff at the branch.

"They did everything they could to help by reducing their hours," she said.

The BNZ Partners agribusiness and business team will continue to work with their customers in Pahiatua.