Independent retailers' association The Fed has expressed extreme disappointment at the news that PayPoint’s monthly service fee is to rise from April. PayPoint, on the other hand, has reiterated that the rise in the fees is in line with "standard RPI increase" as well as increase in commissions.
Letters advising of the increase have been arriving with PayPoint’s network of retailers since Friday last week (February 28).
The letters state that the rise has followed PayPoint’s annual review of its prices against the retail price index (RPI). It adds that on February 19, 2025, RPI stood at 3.6 per cent.
However, Mo Razzaq, the Fed’s National President described the move as “extremely disappointing” coming at a time when independent retailers were facing unprecedented challenges.
He said, “Fed members are being tested to the limits. Costs are rising, retail crime is at its highest levels yet and independent retailers are beset with red tape.
"In April, businesses are already facing the perfect storm of increases both to national insurance contributions and the national minimum wage. Now, they will have this increase from PayPoint to contend with.”
In 2022 and 2023 – and following discussions with Fed officials – although the payment specialist increased its service fee charge, it absorbed the additional costs caused by inflation to protect its network of retailers. Last year, the full increase was applied.
After being advised of the impending increase at a meeting with PayPoint last month, Fed officials asked the company to think again.
Razzaq said, “It is a huge blow that although we raised the concerns of members with PayPoint, this appears to have fallen on deaf ears and, once again, the company is raising its monthly service fee in line with the RPI.
"PayPoint needs to be aware that this move could have consequences, with some retailers now looking ever more closely at the feasibility of offering some of its services.”
Meanwhile, PayPoint maintains that it remains committed to more opportunities for retailers and its services has resulted in more commissions in the past year.
A PayPoint spokesperson tells Asian Trader, "Our longstanding commitment to drive more opportunities to earn for our retailer partners remains strong, with even more profitable, diversified community services rolled out over the past year.
"This has driven an over 20 per cent increase in commissions paid to our retailer partners year on year, with even more opportunities to generate revenue through our partnerships coming in 2025.”
“It is therefore important to consider the standard RPI increase of 3.6 per cent in that context, with more investment this year in a new Store Growth Specialist team to support our retailers in maximising opportunities to earn, an increase to the amount of face-to-face contact in store via our Retail Relationship Managers and delivering additional support to help retailers earn more revenue from these services."
"This comes a week after it was reported that PayPoint has increased the accessibility of its services by making key training guides available for retailers in Urdu, Indian Punjabi and Sinhalese, the most widely spoken languages among retailers across its network who do not speak English as a first language.
