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.”