EXCLUSIVE: Tesco replaces PayPoint with Payzone in 460 stores

Tesco's decision to switch from PayPoint to Payzone in 'like for like' replacement creates new competition for local shops already working with Payzone

Payzone has signed a new deal to replace rivals PayPoint in 460 Tesco Express and Tesco Extra stores, with the changeover starting last month.

British Gas revealed the change in a message to customers last month informing them that they could now top up via Payzone in Tesco outlets.

Asked about the new partnership, a spokesperson for Payzone confirmed the contract win, telling RN: “We are providing bill payment services in Tesco stores where a previous operator had done so. This is a like for like replacement when it comes to bill payments services.”

The announcement marks Payzone’s second major contract win at the expense of its rivals PayPoint, following British Gas’ decision to move from PayPoint to Payzone at the start of 2020.

Commenting on its contract loss, a spokesperson for PayPoint told RN that the change came after ‘many successful years’ partnered with Tesco. They said: “The decision is naturally regrettable. However, our extensive network of 28,000 locations across the UK, which is bigger than all banks, supermarkets and Post Offices put together, remains as robust as ever delivering vital community services. We remain committed to supporting every one of our independent retailer partners with the numerous growth opportunities beyond bill payments, from EPoS and card payments, to parcels and rapid local home delivery in partnership with Snappy Shopper.”

Describing its new partnership, the Payzone spokesperson added: “This extension of the Payzone network benefits vulnerable and elderly customers in particular who are can now top up their gas or electricity cards and pay a bill whilst doing their shop in a Tesco store they have likely been going to for several years.”

The move also brings concerns for nearby Payzone outlets that previously had a local monopoly on offering British Gas services. Some of the newly added Tesco Payzone sites are less than 200m from an existing independent retailer providing Payzone services, such as in Purley, London. A CWU spokesperson expressed concern that if parcel pick up and drop off services were included at the Tesco sites, ‘poached’ parcel volume could make some nearby Post Office branches ‘unsustainable.’

Payzone refused to say whether it would waive its minimum transaction charges for independent Payzone stores that drop below the required weekly threshold due to new competition from nearby Tesco stores, but implied that it did not affect a significant impact on nearby partnered stores. The Payzone spokesperson instead responded: “This partnership is all about enhancing our network. The shoppers using this service already visited this Tesco to do their shopping and pay their bills and we are providing a continuity of bill payment services for these shoppers.”

Retailers can use Payzone’s storefinder to see if a Tesco site has been added nearby.

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