Retailers terminate PayPoint contracts over £10 charge

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A growing number of retailers are terminating their PayPoint contracts in the wake of the “final straw” of the imminent £10 monthly charge for the established yellow terminals.

The £10 charge will come into effect on 1 June, but retailers can give 60 days’ notice without charge. PayPoint is encouraging retailers to take up its next-generation PayPoint One terminal, which costs £10 per week.

But C-Store has spoken to a number of retailers who are reluctantly cancelling their contracts, on the basis that the £10 charge will exacerbate what is already a loss-making service for them.

“Bank charges are already exceeding the commission we received, it costs me up to £15 a month to operate. The £10 charge is the final straw,” said Howard Coffey, owner of Budshead General Stores in Plymouth.

“It’s their product we’re having to pay for. They’re using the fear factor over footfall, but most people who use PayPoint here don’t buy anything else. Lots of retailers are waiting to see if PayPoint will change their mind, but I’ve taken the bull by the horns. We’re not here to support their business, and our customers understand when we explain it to them.”

Kate Mills, of Heath Stores in Horsmonden, Kent, has also opted to terminate her contract. “The PayPoint service already runs at a loss and the introduction of this charge means that this service is no longer sustainable. It is simply not acceptable for a small retailer to make losses so PayPoint can continue to make multimillion pound profits.”

She added: “Unfortunately, the withdrawal of this service… will leave the vulnerable people of Horsmonden with nowhere locally to pay their bills.”

She said the new terminals “are not needed and are too expensive”.

Numerous other retailers have posted on the Facebook PayPoint Pay Fair site that they are also terminating contracts.

Mo Razzaq, who owns two stores in Blantyre, South Lanarkshire, said he was keeping PayPoint for the sake of his customers, despite making a loss on the service. “We do sales of £8,000 a week - it’ll hurt our customers too much to take it away.”

He is planning to upgrade to PayPoint One, but described as “morally wrong” the contract’s two-year notice period. “Everything they’re doing is to protect them and no one else,” Mo said.

However, Middlesbrough retailer Bay Bashir said PayPoint was such a high footfall driver that it was a “no-brainer” to keep the service. “I do £25,000-worth of sales in one store and recycle the money for free in an in-store ATM. The new terminal is much smoother and more efficient.”

Readers' comments (16)

  • Hi after 15 years of service we have given out notice to pp I used to do £20k a week that has dropped to £3000 a week since my customers understand that we are not a charity and need to earn a living too!!
    I really wished paypoint would see the bigger picture and see the retailers are the ones that do the hard grafting long hours 7 days a week! Should we not be looked after too that's what businesses do to have a good relationship.
    No human on earth is going to supply a service and lose money! Not good business sense is it!

    "Look after the retailer who will look after the supplier who will look after the company"

    Anyway I will still keep trying to sorce some way for my customers to keep paying their stuff and coming in my shop!!

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  • Paypoint should hang its head in shame and be halls fed by our MP's as to how they justify capping commission at 7p. The average transaction time is 2 minutes do that works out at £2.10!! Modern day slavery reinvented by Paypoint

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  • Pay point never got explaintion about commission they pay to retailers..which are capped or uncapped .and the chargers are ridiculous ...now these new chargers from next month is disgusting ..

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  • Can retailers keep the machines but introduce a charge for customers using it I don't have PayPal but if people need to use it they will pay the fee.

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  • All retailers nationally should cancel there contracts, PP are robbing the sector as there profits go up do do there charges. Lotto also need to increase there commission to 15%. My firm specailises in retail accountants and business support, the sector needs to start dictating not the supplier.

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  • I have just gave notice after more than 20 years.The increase in fees is bad enough but automatically enrolling you in a 5 year contract is disgraceful.

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  • Here's a novel idea. Why don't retailers run their shops the way they want to and offer the goods and services they want to? Jack Cohen did. Gordon Selfridge did. Frank Woolworth did. Sam Walton did. Simon Marks did. (And none of them needed paypoint!). Have a nice day.

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  • The real mystery is why so many shopkeepers ever signed up for this unprofitable deal in the first place. Too many amateurs in the trade these days.

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  • Does anyone have a spare basket for a shop bike?

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  • So-called "footfall drivers" like PayPoint, rely on retailers' natural desire to attract customers from their competitors. Once hooked, terms and conditions are changed to the retailer's disadvantage; now, the "footfall driver" relies on the retailer's reluctance to disappoint customers who want to pay bills, buy a lottery ticket, send a parcel, buy a stamp, or collect a pension.

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