Independent retailers association The Fed has expressed extreme disappointment at the news that PayPoint’s monthly service fee is to rise from April.
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.”
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.
