Sir; With reference to last week’s feature on PayPoint, the row over margins to retailers will not go away until they reach a level that is acceptable to retailers.
Personally, I have no problem with the percentage margin on mobile top-ups. It is the 0.5% commission and 13p capped rate on utility payments that is the problem and my views are bound by this.
Unfortunately, independent retailers cannot afford to give up a service which customers expect from a local store, yet the customers also expect not to queue and want speedy service.
We take tens of thousands of pounds at some of our stores every week on services and it is a simple calculation to see that it costs us money to offer these services, yet it would be a massive commercial gamble to take it out and force customers elsewhere - and PayPoint knows this.
It is not uncommon for a store taking £25,000 a week through traditional trading to take another £20,000 on PayPoint and, indeed, a combined total of £45,000 a week is very attractive. Yet the traditional business is supporting the loss-making services side.
Another problem is that payment services such as PayPoint and Payzone are also common areas for fraud - many retailers have had instances of internal theft, whether it is a member of staff paying a bill or topping up their phone, or doing it for friends and family and not taking payment. This adds to the cost of running the service.
My main gripe, however, lies with PayPoint adding additional new services at the same 0.5% commission rate, with council housing rent being a prime example.
The margin issue has been going on for a long time and this demonstrates that PayPoint is neither listening nor prepared to listen; otherwise new services would have been agreed on better terms.
If there is no more money in the pot for PayPoint to share with retailers, then a nationally agreed transaction charge is the only way forward. Even if this was only 20p (or 25p or 50p even), it would drastically alter the profitability of a terminal.
Retailers would be happy, the customer would be happy with a modest charge - the PayPoint issue would go away and we could all get on with running our businesses!
We don’t need to make thousands out of PayPoint, but a modest amount to cover costs plus a little profit would be fine.