Sir; With regard to your latest coverage on PayPoint (‘The case for the defence’, The Grocer, June 4, p30-31), we have PayPoint or Payzone terminals in all our outlets. Our main reason for installing them was to cover the withdrawal of paper top-ups for mobile phones.
In the past two years, the number of service payments has increased dramatically with gas, electricity, council housing and rents to name a few.
These all offer much-reduced commission rates of about 1% or capped charges.
We find that today only 10% of our PayPoint and Payzone turnover is related to mobile top ups. This has caused two major problems. First, commission rates bear no resemblance to the banking charges we incur and the number of staff we have had to dismiss for using the terminals fraudulently has become a major problem.
In some locations, the level of transactions is deterring other, more profitable customers from visiting our stores as the queues can be offputting.
One of the selling pitches has always been that the terminal will help generate additional footfall and there will be spin-off sales. In our estate this is clearly not the case. The vast majority of PayPoint and Payzone users do not buy any ancillary goods when visiting our stores.
The level of profit generated through this service is minimal and we are reviewing it.
In every likelihood, it could be removed from the vast majority of our outlets this year.