Electronic payment provider Payzone has paired up with rival 3R in a bid to reduce PayPoint's stranglehold on the market.

Payzone will provide a full range of services, including mobile top-ups, utility payments, travel tickets and gift card sales, across 3R's network of 1,800 retailers. The contract will increase Payzone UK's total volume of transactions processed by 10%.

PayPoint, which will still have the dominant market share, demands exclusivity from retailers, which makes it hard for Payzone and 3R to get their units into many stores. They hope the expanded services will make their terminals more appealing to retailers currently using PayPoint only.

The two companies have previously campaigned for PayPoint to remove exclusivity agreements.

PayPoint faced more criticism over its exclusivity clause this week after Mukesh Goradia, an independent, accused it of "bullying tactics" over his use of a 3R terminal alongside the PayPoint machine.

PayPoint has asked for its terminal back after two-and- a-half years - even though Goradia claims he told PayPoint he had no intention of getting rid of his 3R terminal when the PayPoint unit was installed.

"No retailer is obliged to join our network, but if they do we expect them to comply with the terms of their contract that they freely sign," said PayPoint retail director Mike Igoe.