PAYPOINT has come in for a storm of criticism from a number of independent Scottish retailers following the introduction of a new monthly fee for stores using its traditional yellow terminal.
From 1 June, retailers using the yellow terminal are liable for a £10 per month fee, causing a number to end their relationship with the company.
Marco Sinforiano, of Sinforiano Bros in Kilmarnock, said that on seeing the new contract from PayPoint, he thought it was “backwards”, as the alternative to paying to maintain an old machine is an upgrade costing £10 per month.
“What I would like to know is why when PayPoint started up and had those costs, why were there no charges then, but now they’re established they’re charging £10 a week per terminal,” he said.
“Where’s the encouragement to get the new terminal if the old one still works? I’ve still got it, I’m trying to hang on to my old machine.
“It’s almost like they’re trying to make you take their new system. I wouldn’t like to think so but it kind of feels like that.”
Sinforiano said he will still have PayPoint in his store. He wouldn’t want to see customers bypass his store to use the facilities at another location, but not all have stuck with the service.
Charlie Nazir of Pace Convenience Store in Alexandria, West Dunbartonshire, said that although his store was the first in his area to sign up with PayPoint he has now ended a relationship that’s lasted over a decade.
“I’ve sent them an email and a recorded letter. I’ve only had an automated response.
“To PayPoint we’re just a number, that’s all we are. They’re obviously not interested,” he said.
“I’m an agent but I’m not doing a lot of transactions for them. We don’t know how PayPoint are thinking but if they’ve lost me it’s less administrative work for them. If customers go to another local agent they don’t mind.”
Nazir added that the five year tie-in that forms part of PayPoint’s contract was also a big concern for him, and hindered his ability to plan for the future.
“What really gets me is the five year contract, there’s no way anyone is holding me to ransom for five years.
“Say next year I decide to sell my shop, if I do I’ve got to insist the buyer takes PayPoint,” he said.
Linwood retailer Dilak Lusar of Premier Bridge Street Convenience Store also fired criticism in PayPoint’s direction, and said he has cancelled his contract with the firm as the service does not add any value to his business.
“It doesn’t really make me any money. It creates footfall but you don’t get any spin-off sales from it,” said Lusar.
“PayPoint themselves are making a fortune and not giving us anything back. If they gave us maybe 10% of transactions it would maybe make more sense.
“At 7p a transaction, if you do one a minute you’re only getting £4.20 an hour. That’s less than minimum wage.”
Lusar added that he believes PayPoint’s recent changes to the agreement may be “the best thing ever, as it gives me a chance to leave the contract”.
A spokesman for PayPoint said its new pricing “reflects the costs involved in supporting older terminals whilst allowing retailers to maintain the current terminals in their stores prior to our upgrade programme commencing if they want it to”.
“Acting on retailer feedback, last year we revised our contract terms and included a provision to allow the termination of your agreement after two years notice, a 60-day mutual termination right for service fee increases and reduced fees for direct debit failures,” he said.
PayPoint said exact timings for the phase-out of its yellow terminals will be released “later this year”.