NFRN asks regulator to investigate PayPoint’s plans

PayPoint transaction

The row between the NFRN and PayPoint shows no signs of abating, as the independent newsagents group publically called on OFGEM to launch an immediate investigation into PayPoint’s proposed reduction in commission caps.

In his letter to the Government Regulator for the gas and electricity markets, NFRN Chief Executive Paul Baxter said PayPoint’s move to reduce the cap on margins from 13p to 10p and as low as 7p in some cases, placed retailers who currently received “extremely meagre margins to the point where they made hardly any profit from transactions” in “an invidious situation”.

He added that PayPoint’s proposals had to be considered alongside its Terms and Conditions that demanded minimum transaction requirements and disproportionate early-termination fees, and came as the payment service provider had pressurised retailers to sign new three year contracts.

Baxter said: “The NFRN believes that all retailers with PayPoint terminals will now be assessing the commercial viability of maintaining this service to their customers. Inevitably, unless action is taken to redress this erosion of commission, many retailers will be deciding whether it is preferable to pay the early termination charge and rid themselves of this loss making service, and many more retailers are now likely to be deterred from becoming a PayPoint retailer in the future.

“The NFRN urges OFGEM to urgently investigate this matter before consumer detriment becomes irreversible.”