The storm over the margins and terms offered by PayPoint, the utility payment network, is in the news again and our Reader Panel survey found that 71% of retailers were dissatisfied.
Some independent retailers have complained that the low level of commission on offer is a rip-off.
But the issue is far from clear cut, as we discovered when we spoke to shop owners visiting Booker’s Medway cash and carry depot in Rochester, Kent.
Although the amount of money to be made by retailers from PayPoint is relatively small, there was no doubt many we spoke to felt that they had to provide the service.
Peter French, who runs a 500 sq ft c-store in Faversham, said revenues from PayPoint were not satisfactory, but he still believed it was an essential offering.
“It takes people away from the high street shops and brings them in to our store,” he said.
Arthur Pearce, who runs a 770 sq ft Premier store near Canterbury, said the margins and terms offered by PayPoint were “awful”.
He added: “Quite frankly, they are getting money for old rope. I would like to see the cap fixed higher.
“It’s limited to 13p on most items, which in this day and age I don’t think is realistic. Not when you’re paying staff the minimum wage, and it probably costs more than 13p to pay a member of staff to deal with a customer.”
But Pearce would not dream of dumping the service. “I keep it because it brings in 30-40 customers a day. Of those, probably 25 spend money in the store.”
S Patel, who runs a 6,500 sq ft c-store in Sittingbourne, pointed out that while PayPoint’s commission was low on utility bill payments, it was higher - around 4% - on mobile phone payments.
We also asked retailers about other services they offered in their stores. Cash machines, they said, can be a money-spinner owing to the high commission levels on offer - anything from 44p to £1 per withdrawal.
But security is already an issue for c-stores, and there are fears that a cash machine on the premises constitutes a risk too far. “I’ve had six armed robberies in the past 12 years,” said French, who will not install a cash machine.
Pearce has just installed a machine, though he will only be leaving small amounts of money in it in order to alleviate fears of attracting thieves.
However, Patel said that having a cash machine in his store, alongside PayPoint and the National Lottery, had helped to triple his turnover.