PayPoint has claimed its commission paid to the average independent store has seen ‘double digit’ growth, fuelled by rampant parcel volume increases.

Newly released results for the year ending 31 March show a bumper year for PayPoint’s underlying profit before tax – up by 10.7% to £68m despite revenues growing just 1.4% to £310.7m.

Some of this success was attributed to PayPoint’s store network growing by more than 1,500 sites, including more than 1,000 independent shops. Higher fees paid by stores for PayPoint terminals also played a part in its enhanced profitability.

The average PayPoint site is now paying £676 per year in terminal fees and receiving £1,358 in commission per year – a slight year-on-year drop in payments to the average store.

When challenged by Better Retailing on the figures, PayPoint chief executive Nick Wiles suggested the average is misleading as while multiple retailers’ PayPoint sites might be making less, the dominance of independents in PayPoint’s booming parcel business has seen the average independent shop’s commissions grow.

Wiles explained: “We’ve done some work and I don’t think we would agree [that commission is falling], our average commission into the independents is up around 30%.”

PayPoint’s plan for profit, both for itself and for its stores, is to make new higher commission services account for a greater share of its total transactions. Wiles explained: “we want retailers to really embrace the full range of PayPoint services so they get as much value as they can from being a PayPoint retailer, it doesn’t work for us and it doesn’t work for them if they are just offering cash bill payments.”

‘Legacy’ bill payments

Better Retailing challenged PayPoint on why, despite its terminal fees increasing with inflation each year, stores’ commission rates on many services remain unchanged, cutting the real-terms profit per transaction. Wiles responded: “The utility companies have been pressing us really hard, and each time we’ve renegotiated the contract the margin has come down so we’re feeling the same squeeze our retailers are which is why there’s such an emphasis on new services.”

Overall, PayPoint’s revenues from energy bill payments dropped 6.5% compared to the previous year, which the company said was ‘consistent with our expectations’.

Gift vouchers

In contrast to the falling profitability of ‘legacy’ bill payments, Wiles described newer services like physical gift cards on-sale in PayPoint stores stating: “We’re really trying hard to make sure that there’s a much higher percentage of revenue share. If you take the Love2Shop physical gift cards, on a £30 load that’s worth over £3 to the retailer, that’s a great example of adopting new services seeing high levels of incremental commission.”

PayPoint said over 2,600 major grocer and Highstreet chain stores are now stocking Love2Shop gift cards, delivering around £1m of value processed per year.

Banking

PayPoint is to add ‘at least’ two banks to its ‘Local Banking’ service, allowing customers to carry out cash transactions in stores. The chief executive explained: “There’s going to be a really detailed rollout program over the next two to three months. For app-enabled cash access this will capture the full 30,000 store network. The card enabled cash access will probably be less than that, around 3,500-4,000 sites to start with.”

As part of the introduction of more banking services, PayPoint is also exploring higher daily transaction limits for stores, but said this would only be done in partnership with the retailer and banks.

In early 2026, Wiles revealed PayPoint will also begin rolling out devices to stores designed to take large cash deposits of up to £3,000 from business customers.  “We’re going to have a separate machine in stores with no [cash] handling [by the retailer],” he explained.

Parcels

The number of PayPoint stores taking part in its Collect Plus parcel network has jumped 20% in the last year to 14,213, while parcel volumes have increased by 33%.  This is equivalent to each parcel store handling 25 parcels per day.

Despite Yodel and InPost services being removed from some Collect Plus stores, PayPoint is still forecasting overall expansion in the total number of Collect Plus sites this year, powered by InPost expanding to 6,000 over-the-counter parcel service sites this year through PayPoint’s network.

However, independents are likely to have a slightly smaller share of upcoming network growth than in previous years. PayPoint’s parcels are now flowing through centrally owned One Stop and Spar Northern Ireland sites. A  ‘pilot’ of PayPoint’s parcel services is also underway in Asda stores.

Asked what other new sites are planned for the year ahead, Wiles said: “if you’re going to make consumers adopt out of home parcel services it’s got to be embedded into their lives, so it’s things like EV charging points, more universities, more supermarkets and broadening out the range to where people spend their lives. We’re looking at some charity shops as well. The principle is that it can’t be just more independents.”

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ATMs and counter cash

In a ‘frustrating’ year for PayPoint’s ATM estate, the total number of sites offering ATM or Counter Cash services dropped by a third, partly driven by removing Counter Cash from sites that had the service but were not carrying out transactions.

PayPoint said a ‘recovery plan’ to fix problems with its ATM estate is underway. Wiles said: “We know that cash transactions through ATMs continue to decline but the reality is we’ve not been running our estate as well as we should have done, it’s a real back to basics approach that engages with retailers early when their ATM in store isn’t working and making sure we’re monitoring those machines and prompt retailers when they don’t have cash in them. I’m personally quite frustrated it’s taken us so long, but the ATM team are absolutely on it.”

Wiles told Better Retailing that between 150-200 previously free cash withdrawal machines had been switched to pay to use. “The main reason is to keep that site open and that it remains profitable but it’s a small number in the context of our overall estate,” said the chief executive.

Store growth specialists

PayPoint’s focus on getting stores to offer a wider range of transactions is being supported by its new ‘store growth specialists’ team. These employees visit stores equipped with a full breakdown of their performance benchmarked against other sites, which is used to suggest ways to improve the profitability of PayPoint for the store and attract new shoppers.

Wiles told Better Retailing: “in these tough times for our retailers, being a PayPoint retailer adds value to your business, and we’ve got to reinforce that message with the store growth specialists. We want our estate to continue to grow. We want our retailers to make more commission and we’ve got to enable that in every way that we can, I don’t think we’ve ever been more focused on that.”

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