Julian Hunt
PayPoint has come out with a robust defence of the poor commission it offers on utility payments in the face of growing retailer anger at the amount they earn on transactions.
The company, which is the leading supplier of payment terminals, insisted it always sought to maximise the commission retailers earned on bill payments.
And in a statement to The Grocer, it said: "While we are extremely sympathetic to retailers who find themselves operating in difficult trading conditions, our commissions are determined by the need to offer utility companies a cost-effective alternative to the Post Office."
It added: "If PayPoint did not do this, the bill payment business would move to the Post Office and retailers would miss out on the opportunity to earn commission from it."
The PayPoint statement came in response to a feature in this week's issue where retailers express their frustrations at the poor rates of commission they earn on utility payments.
The company said it offered higher levels of commission on new schemes exclusive to PayPoint, such as the BT pre-pay scheme and the London Congestion Charge. And it said it had doubled Northern Ireland Electricity and Quantum gas pre-payment commissions to 1%. But retailers point out it has kept the 13p cap on payments.
The company also claimed independent research shows more than half of the 130 million utility bill transactions PayPoint generates each year resulted in other sales, averaging £6 per basket, generating £429m of additional sales for retailers.
"We remain convinced that PayPoint offers retailers a fair and attractive proposition a view reinforced by the fact that as many retailers want to join the network as are part of it."
But the company's statement was slammed by leading figures in the independent sector.
Rod Stevens, head of commercial operations at the National Federation of Retail Newsagents, said: "PayPoint have been successful at the expense of thousands of retailers who are taking ridiculously low, and often negative, margins. They have not done anything to improve retailers' commission."
He said PayPoint must have been asleep for the past year if it thought only a small number of retailers were unhappy with commission rates. And top Spar retailer Jim Botterill, who is president of the Scottish Grocers' Federation, agreed.
Botterill also described claims of a £6 average basket spend as "fictitious" given that the average c-store spend is £3 to £3.50.
Stevens thought it nonsense to suggest PayPoint generated extra sales. "When customers use the utility payment service they arrive with an amount of money all of which is for that payment"
>> p31 View from the frontline
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PayPoint has come out with a robust defence of the poor commission it offers on utility payments in the face of growing retailer anger at the amount they earn on transactions.
The company, which is the leading supplier of payment terminals, insisted it always sought to maximise the commission retailers earned on bill payments.
And in a statement to The Grocer, it said: "While we are extremely sympathetic to retailers who find themselves operating in difficult trading conditions, our commissions are determined by the need to offer utility companies a cost-effective alternative to the Post Office."
It added: "If PayPoint did not do this, the bill payment business would move to the Post Office and retailers would miss out on the opportunity to earn commission from it."
The PayPoint statement came in response to a feature in this week's issue where retailers express their frustrations at the poor rates of commission they earn on utility payments.
The company said it offered higher levels of commission on new schemes exclusive to PayPoint, such as the BT pre-pay scheme and the London Congestion Charge. And it said it had doubled Northern Ireland Electricity and Quantum gas pre-payment commissions to 1%. But retailers point out it has kept the 13p cap on payments.
The company also claimed independent research shows more than half of the 130 million utility bill transactions PayPoint generates each year resulted in other sales, averaging £6 per basket, generating £429m of additional sales for retailers.
"We remain convinced that PayPoint offers retailers a fair and attractive proposition a view reinforced by the fact that as many retailers want to join the network as are part of it."
But the company's statement was slammed by leading figures in the independent sector.
Rod Stevens, head of commercial operations at the National Federation of Retail Newsagents, said: "PayPoint have been successful at the expense of thousands of retailers who are taking ridiculously low, and often negative, margins. They have not done anything to improve retailers' commission."
He said PayPoint must have been asleep for the past year if it thought only a small number of retailers were unhappy with commission rates. And top Spar retailer Jim Botterill, who is president of the Scottish Grocers' Federation, agreed.
Botterill also described claims of a £6 average basket spend as "fictitious" given that the average c-store spend is £3 to £3.50.
Stevens thought it nonsense to suggest PayPoint generated extra sales. "When customers use the utility payment service they arrive with an amount of money all of which is for that payment"
>> p31 View from the frontline
{{NEWS }}
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