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Independent retailers are disappointed that utilities payment provider PayPoint is to push ahead with plans to increase its service fee charge by 3.9 per cent next month after urging the company to reconsider.

Senior Fed officials were first advised of the increase during a meeting with PayPoint management last month.

At this meeting, the Fed reminded PayPoint of the challenging trading environment that retailers were operating in and the low margins that retailers received in return for having a PayPoint terminal.  During discussion, PayPoint was pressed to think again.

However, this week, letters were being sent out to PayPoint customers advising that as in past years, the company had reviewed its service fee charges in line with the Retail Price Index (RPI).  At the time of doing so – on February 16 2022 – RPI was confirmed at 7.8 per cent.

However, PayPoint further advised in the letter that in recognition “of the broader cost pressures for our retailer partners, we feel it would not be right or appropriate to apply this in full” and was raising its charge by 3.9 per cent, absorbing any additional burden itself.

Commenting on the increase, Fed National President Narinder Randhawa said: “As each day goes by, it seems that independent retailers are being hit with one blow after another.  We are already expecting huge hikes to our energy bills from April, coupled with increases in the minimum wage and associated employer contributions and the reintroduction of business rates.

“Now, despite being encouraged to do otherwise, PayPoint is adding to our financial woes by increasing its charges,” Mr Randhawa added.

“When we were first told of its plans, we thought we had made it clear that we vehemently disagreed with it. It is very disappointing, then, that PayPoint is pushing ahead with any increase at such an economically challenging time for independent retailers everywhere.”

To mitigate the effects on independent retailers, however, the Fed will work with PayPoint on making members aware of opportunities from the utilities provider’s other initiatives, such as PayPoint Counter Cash, MyStore+ rewards app and Love2Shop digital vouchers.

Mr Randhawa added: “We are pleased that representatives from PayPoint have agreed to attend our spring national council meeting in Birmingham in April to explain more.”

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