PayPoint paid retailers £5m less in commission last year despite an extra 21 million transactions being processed.
The group’s preliminary results revealed a 17.8% increase in retail services transactions, with transaction value up 21.9% to £1bn and retail services net revenue up 14.3% to £30.3m. Overall group net revenue was up 0.4% to £123.6m for the year ending 31 March.
Meanwhile, retailer paypoint commission decreased to £57.7m from £63.3m, which the group attributed to last year’s commission cut and a decline in mobile top-ups.
David McCann, director at stockbroker Numis Securities Limited, said PayPoint is keeping a greater share of paypoint commission from bill payment transactions. He estimates the amount paid to retailers has fallen from 35%-40% to 29.5%.
“Had PayPoint not cut commission, its revenue would not have risen so much,” he said.
Talk of PayPoint shifting its focus to the service it provides retailers, he added, seems to “gloss over” last year’s fallout. “Management is trying to put a brave face on it,” he said. “A year ago, it was saying ‘there’s no problem at all’.
“It is equally trying to gloss over it now, saying all problems are fixed. But offering retailers a freephone number and engaging a bit more doesn’t seem like the kind of thing to immediately solve problems.”
While retailers told RN they had seen some positive change in PayPoint’s service, they added issues such as banking charges had still not been tackled.
Kay Patel, of Global Food & Wine in Stratford, said: “Retailers haven’t changed their opinion of PayPoint. The commission cap was the final straw.”
NFRN chief executive Paul Baxter said: “Retailers continue to suffer from the cutting of commission caps. It is outrageous that PayPoint considers it appropriate to pay shareholders a ‘special’ dividend.”
PayPoint chief executive Dominic Taylor said the group has listened to retailers to understand issues and deliver “the best possible service”, including a new freephone number and investment in technology with PayPoint One.
PayPoint will work with retailers through its continued focus on retail “to evolve their businesses and drive more value to them”, he added.