PayPoint revenue significantly down from in-store services
Chief executive Nick Wiles blamed a combination of Amazon and the tiered lockdown restrictions for the disappointing figures
PayPoint services in stores including ATMs, top-ups and bill payments remain significantly down, delivering a fall in year-on-year revenue for the company.
However, it heralded a move to “balance” these declines against growth in its focus areas of card payments, retailer weekly service fees and parcel volumes.
Comparing September in 2020 and 2019, transactions in the average partner store were down by 19% for bill payments, 18% for ATMs and 17% on top-ups.
Conversely, parcels were up 10%, eMoney payments up 15% and card transactions up 54%.
PayPoint previously said it would only expand its parcels network with parcel volume growth to avoid “diluting” footfall to existing parcel stores.
However, during the pandemic, PayPoint sites handling parcels increased 20% to 10,486 despite overall half-year volumes dropping by 2.5%.
When challenged, chief executive Nick Wiles told betterRetailing: “Amazon has been disappointing to us in terms of volume. We put the [Amazon] network in place, which is why we’ve grown, yet we haven’t seen the volumes.”
He said DPD parcels were added to its Amazon parcel network to drive volume into those stores. He said DPD had “very quickly overtaken Amazon volumes”.
Click & collect was the area most hit by local lockdowns. Wiles said: “In Northern Ireland, which was one of the first to implement restrictions again, we saw volumes coming off because people were having their parcels delivered to home.
“Our parcels business is fairly sensitive to the tiering structure.”
The firm also focused on deliveries made out of stores. Three hundred retailers signed up to Deliveroo through PayPoint.
Wiles revealed PayPoint is looking to strike similar deals with Deliveroo’s rivals, with hopes to integrate delivery management systems directly into its EPoS terminals.
More than 800 stores installed its PayPoint One EPoS system since the end of March, taking it to 16,900 sites.
PayPoint is also receiving a higher average weekly fee due to retailers upgrading to more expensive models. This was aided by a ‘try before you buy’ scheme, with 765 trial sites receiving a free three-month upgrade.
PayPoint estimated two-thirds would convert to the higher fee variant. Planned free trials in spring will feature improved support and education for stores.
On top of risks posed by the coronavirus pandemic, legal action and a potential fine from regulator Ofgem also looms. Ofgem alleges PayPoint harmed customers through its exclusivity terms with suppliers and retailers.
Asked if PayPoint would change its approach to retailer and supplier contracts, Wiles said he was unable to discuss details, but said: “We’re hopeful we can bring it to a conclusion quickly because of the uncertainty it creates.”
Read more PayPoint news and articles
This article doesn't have any comments yet, be the first!
Register to comment and get exclusive content and subscribe to the online and print versions of Retail News.Become a member