The Scottish Grocers Federation (SGF) has urged members who operate PayPoint to go through a checklist to ensure they are getting the right deal.

Its call comes after PayPoint made changes to the terms and conditions of its retailer agent contracts and introduced a £10 a month service fee for the old-generation yellow terminals running on dial-up, and £10 a week for PayPoint One, the new-generation unit.

The SGF said a retailer would be deemed to have accepted the full terms of the “contract variation” unless they terminated their contract before 1 June.

The new contracts will continue to last for five years but a two-year rolling notice period has been introduced.

SGF chief executive Pete Cheema said retailers could decide for themselves what was best for their business but they should go through a checklist to see if PayPoint was providing the right solution at the right price.

“Does it encourage footfall? Does the PayPoint-related basket spend really make a profit? Does the commission rate cover the overall transaction cost? Does PayPoint provide enough flexibility in terms of other providers they could deal with?”

Retailers should answer all those questions before signing up, Cheema advised.

Steve O’Neill, PayPoint group marketing director, said the £10 a month charge for the older generation boxes had been previously been in place for broadband-connected terminals.