For the second column in a row I am returning to the NFRN’s dispute with PayPoint following the reductions it has made to commission caps. I make no apologies for doing so.

Since my last column, events have moved on apace. Based on a number of invoices supplied to us by members we already know that most of them are making a loss on PayPoint transactions. Add to that punitive bank charges and other operating costs, and this means that losses could be significant.

PayPoint needs to do its sums, realise what it is doing to retailers, stop using them as a cash cow and pay commissions that ensure retailers can make a modest profit from their efforts on the company’s behalf.

City analysts Numis have warned that our claims against PayPoint’s actions were justified. It reiterated our point that many retailers were struggling to make a gross profit from PayPoint transactions and that they would be losing considerably more per transaction when commission caps fell as low as 7p.

Our letter to energy regulator OFGEM has therefore been posted and warns of the invidious situation that PayPoint retailers now find themselves in and calls for an immediate investigation.

Following an encouraging consultation with a senior Competition counsel, we are escalating our dispute by making a formal complaint to the Payment Systems Regulator (PRS) and seeking a full market investigation into the over-the-counter payment and collection services market. 

This complaint will include all of PayPoint’s terms and conditions and will set out how the utility service provider’s exclusivity clauses impact detrimentally by limiting consumer access to alternative services.

Seeking a full market investigation like this is not a decision we’ve taken lightly. We recognise the outcome could have far-reaching consequences, but as PayPoint has refused to listen we cannot sit back and watch while the company funds its considerable profits at our members’ expense.

Our members can be assured that when it comes to fighting injustice the NFRN will leave no stone unturned. They can also rest assured that when it comes to a fight, the federation is the only association with an appetite to seek retribution for independent retailers.