Retailers considering leaving PayPoint rather than pay the additional charges must inform PayPoint of their decision to leave before the end of May.

Those who do not will automatically be enrolled in a new contract lasting five years (with a two year notice period).

The new contract is part of PayPoint’s attempts to move all retailers to its new PP1 terminal, rather than its current yellow box. Those upgrading to PP1 on or after June 1 will have to pay £10 per month for the Base model, or £15-£20 per month for their EPoS system.

Those remaining on the yellow box after May 2017 will pay £10 per month for the terminal and £20 for card payments. When the yellow box is retired this will increase to £10 per week for the terminal.

Recent NFRN survey data claimed PayPoint is not profitable for 89% of respondents. Further EPoS data from the NFRN showed that 54% of nearly 2,000 retailers made less than 3% of their profits from other items included in PayPoint transactions.

Discussing PayPoint’s transition from a payment provider to an EPoS system provider, NFRN’s advice reads, “Whatever PayPoint’s business strategy, independent retailers need to also look at their business strategy in terms of profitability ie service portfolio, margin and additional cost to move into new technology.”

Responding to the NFRN’s survey, a spokesperson from PayPoint said, “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.

We have regular and constructive dialogue with many retailers, both individually and as part of our retailer forums and have listened to feedback and made changes to how we do business, including the launch of PayPoint One and introducing a new freephone number for our contact centre.

For the few who believe PayPoint does not work well in their stores, we have worked to shorten notice periods and reduce exit costs.”

The spokesperson concluded, “Moving forwards we know that there is still room to do more and through our continued focus on retail and innovation in technology and we will work with our retailers to evolve their businesses and drive more value to them and the communities they support.”

Do it: Calculate whether the new charges work for your business using NFRN’s factsheet