Paypoint has been accused by a rival operator of trying to force retailers into exclusivity agreements.

The row revolves around Paypoint customers in the London area who are also offering payment services through the 3R Telecom platform.

3R Telecom company director Ramesh Patel told The Grocer he was currently receiving two or three calls a week from retailers that had been told to remove the 3R terminal or face the removal of their Paypoint platform.

"Paypoint is causing a headache for a lot of my customers," said Patel.

"It must know that when it signs up these retailers they already have a 3R terminal, so why is it a problem six months later?"

Patel said he asked his local trading standards authority to investigate the matter, but said he was told there was insufficient evidence to warrant an investigation.

He was now looking to gather further evidence, he added.

One of the retailers who claims to have been affected, Jatin Desai of JB Newsagents in east London, said Paypoint had told him it was going to take out its terminal after he refused to stop using 3R Telecom.

"I have been working with 3R Telecom for 15 years and we have an excellent relationship," he said. "It would just not be right to stop trading with 3R now."

Mahesh Patel, a Londis retailer in Romford also said he had come under pressure from Paypoint to remove other terminals but refused because 3R and Payzone offered margins of 5% compared with Paypoint's 3.5%.

"I am in charge of what I sell in my own store," he said. "No one can tell me what I can't offer."

Paypoint, which has faced criticism from some retailers in the past few years over its margins,

the speed of its terminals and its standard of customer service, refused to comment.

n Paypoint rival Payzone is to install mobile phone top-up services in Netto's 177 UK stores.

The retailer expects to process about 1.4 million in-store transactions annually, worth an estimated £12m.