Retailers disappointed as PayPoint hikes monthly service fees

Indie retailers have expressed “extreme disappointment” over PayPoint’s decision to raise its monthly service fee by 3.6% from April, despite the Fed urging the company to reconsider, according to the trade body.

Letters advising of the rise have been arriving with PayPoint’s network of retailers since Friday last week (28 February).

The letters state that the rise has followed the company’s annual review of its prices against the retail price index (RPI). It adds that on 19 February, 2025, RPI stood at 3.6%.

The Fed has warned that this move could have consequences, such as retailers now looking more closely at the feasibility of offering some of its services, it said.

Mo Razzaq, national president of the Fed, described the move as “extremely disappointing”, especially at a time when indies would be facing unprecedented challenges. He said Fed members are being “tested to the limits” with rising costs, retail crime and the burden of red tape.

“In April, businesses are already facing the perfect storm of increases, both to national insurance contributions and the national minimum wage. Now, they will have this increase from PayPoint to contend with,” said Razzaq.

After being advised of the impending increase at a meeting with PayPoint last month, Fed officials asked the company to think again.

“It’s a huge blow that although we raised the concerns of members with PayPoint, this appears to have fallen on deaf ears and, once again, the company is raising its monthly service fee in line with the RPI,” added Razzaq.

PayPoint, meanwhile, said its longstanding commitment to driving more opportunities for its retailer partners remains strong, with even more profitable, diversified community services rolled out over the past year.

”This has driven an over 20% increase in commissions paid to our retailer partners year on year, with even more opportunities to generate revenue through our partnerships coming in 2025.

“It is therefore important to consider the standard RPI increase of 3.6% in that context, with more investment this year in a new Store Growth Specialist team to support our retailers in maximising opportunities to earn, an increase to the amount of face-to-face contact in store via our Retail Relationship Managers and delivering additional support to help retailers earn more revenue from these services,” said a spokesperson for PayPoint.