From time to time people ring me regarding PayPoint without any specific problem peculiar to their store, but with a very long-held resentment over the amounts of money collected for the group in return for poor commission rates.
No one has made the point more forcefully recently than Stephen Beard. His Londis in Sheffield has had PayPoint since 2004 and he says the amount he takes and the commission he gets have been heading in opposite directions ever since.
He says that some customers come in and spend £500 once a month on PP and he is sure they think they are doing him a favour because he must be getting a big cut. He adds that he feels like saying, ooh, I’m making 13p on this! But he doesn’t think they would believe him.
However, he certainly has no truck with the opinion, voiced by some retailers, that they should be allowed to charge customers for the service.
“I don’t want the consumer to pay more. I want PayPoint to pay me more. It’s scandalous. How do they get away with it? I want PayPoint to pay me out of their cut. They’re a plc, not a charity. A proper rate would be 2% minimum. I’ll bet the likes of British Gas pay a percentage to PP for every pound it collects on their behalf.”
He said he had been rooting for Virgin a few years back when Branson had promised an enhanced commission rate for retailers.
I put his points to PayPoint and spokesman Peter Brooker replied: “Rather than enter into a discussion over commission levels, I would point out that, since 2004, PayPoint has paid more than £500m to retailers in commission (that excludes the year to end March 2011 as we’ve yet to announce our results for the year) and the annual commission to retailers has always been roughly twice our profit level.”
As any regular C-Store reader will know, I’m rubbish at sums. But does that mean that, in the past eight years, PP has made £250m profit?