Annual results released by PayPoint show an increase in retail network net revenues, up 6.2% to £117.5m. However, there has been a sharp drop in both UK transactions and payments.
PayPoint’s retail network growth comes mainly from Romania which is offsetting a declining UK payments market. Despite a 0.3% increase in UK and Ireland sites to 29,176, The number of transactions completed in the UK dropped by 21m, resulting in a £13.4m drop in payments.
Their new PayPoint One terminal had 3,601 installs as of March 31, with more additions expected as the provider introduces a £10 monthly charge from June 1 for users on the old yellow boxes to push retailers into switching.
PayPoint CEO Dominic Taylor stated: “Looking beyond the current financial year, I see significant opportunities for our retail services business, accelerating the growth of ATMs, parcels and EPoS and we will continue to work to build our retailer relations.”
However, retailer relations remains a point of contention for the majority of retailers surveyed this week by the NFRN. The NFRN’s results show that 89% of respondents said PayPoint is not profitable for their business. Asked if they will be upgrading to the new PP1 terminal when the yellow box is retired, 60% said no and a further 36% had not decided yet.
On the yellow box charges, 49% said they would not pay the charges and 38% said they had not made a decision yet.
Stevo Stars from The Wee Shop in Carstairs Junction told Retail Express: “With the new charges I Just don’t know what to do, after the end of NKSupply I moved my SIM sales through to PayPoint but with the new charges it’s just not feasible. They are trying to push people onto their new EPoS system but I’ve already got one, why would I want to use theirs?”
The introduction of the charge represents a break in PayPoint’s five year contracts, allowing retailers to end their partnership with PayPoint without charge if they give 60 days’ notice. If they do not give notice the contract will automatically renew to include the charge.
The NFRN’s head of operations Margaret McCloskey said: "The NFRN conducted an online survey to gauge retailer perception on PayPoint’s new pricing strategy and the result mirrored responses from telephone conversations with members. We have now produced a PayPoint Factsheet to help retailers make an informed business decision on whether PayPoint will be part of the future strategy for their business."
A spokesperson from PayPoint responded to the NFRN Survey results stating: “We are aware of the on-going NFRN poll, but it is difficult to comment on what the findings mean without full knowledge of the survey size and sample."
The statement continued: “Over the past year, we have worked hard to get closer to our network of 29,000 retailers to understand their businesses and improve our service to them."
Responding to the profitability issues suggested by the NFRN survey, the spokesperson concluded: "For the few who believe PayPoint does not work well in their stores, we have worked to shorten notice periods and reduce exit costs."
Do it: Read the NFRN fact sheet on the changes at PayPoint