PayPoint row continues

PayPoint logo

The row over PayPoint’s plans to reduce the cap on retailer commissions has continued, with the NFRN rejecting the idea that PayPoint terminals generate additional footfall and sales, as well as goodwill for stores.

The Federation presented data from one of its 15,000 members which aims to show that having a PayPoint terminal neither builds sales or footfall and that once staff, electricity and banking costs are accounted for there is little or no profit left for the retailer.

The figures reveal that the retailer in question made a total gross profit of £43.30 from commission and additional sales over a week, from PayPoint revenue of £8,700.

NFRN Chief Executive Paul Baxter said: “Add in staff wages of £6.50 an hour, which will be going up by 20p in October, and ever increasing electricity costs for running the terminal and it’s clear how little shopkeepers make from being a PayPoint retailer.”

This stance contradicts PayPoint’s claims, which are based on the latest annual CTP survey of shoppers’ habits and expenditure. The survey reported that the average PayPoint customer spends 25% more per visit than an average convenience shopper (£7.66 vs £6.13) and visits the shop more frequently (4.7 times a week on average vs 3.6 times), which means that, over a week, an average PayPoint customer is worth 60% more – or an extra £685 a year.

A PayPoint spokesperson said: “While not every customer buys other goods every time, nearly three-quarters do, according to CTP. Furthermore, in our most recent survey among retailers, most understand the customer footfall benefit: 87% said that PayPoint is very good or fairly good for footfall.”

These claims don’t cut much ice with the NFRN, however. Baxter wants to see how PayPoint can justify the pending cuts on commission caps – some of which will drop to 7p – given the NFRN’s data and the strong reaction from retailers, many of whom protested on Twitter using the hashtag #PayPointPayFair.

“The NFRN is calling on PayPoint to Pay Fair and urgently review its position,” he concluded.