Retailers have expressed concern over the government's decision to move the benefits payments contract from the Post Office to PayPoint.

From next year the service will be provided by Citibank through the PayPoint network. The government decided to move the contract, worth more than £20m, because the current system of processing cheque payments was deemed too costly and open to abuse.

Sylvia Winter of Creaton PO and Stores in Northamptonshire said that she felt betrayed by the government. "How can they promise to provide new services through the network while taking them away at the first opportunity? A lot of my customers will be unable to travel to the nearest PayPoint outlet."

Steve Denham of Cherilyn Stores in West Chiltington, West Sussex, was concerned over security. "We've recently lowered the maximum amount that our tills can hold for safety reasons, but this service will negate that," he said.

PayPoint head of corporate affairs Peter Brooker said that retailer communication was a priority for the company and it hoped to allay any security concerns. “It’s very early days yet but we recognise that staff and customer security will be an issue which we will be addressing,” he said. “High on our agenda will be communications with our retailers when we have concrete information to give them.”