Five thousand PayPoint CollectPlus sites are to provide Royal Mail parcel pick up and drop off services under a new deal between the company.

The agreement marks Royal Mail’s first new retail network partnership since it moved away from exclusivity with the Post Office in 2020. Better Retailing understands the rollout will begin in March and all 5,000 PayPoint CollectPlus sites will be live by the summer.

While a boon for PayPoint CollectPlus stores, the move is likely to further damage parcel remuneration payments and footfall for Post Office retailers. A message from the Post Office to branch owners claims it was only told of Royal Mail’s deal with PayPoint hours before it was announced.

In a message from PayPoint to investors, seen by Better Retailing, PayPoint said the ‘multi-year agreement’ will ‘support Royal Mail’s strategy to expand its out of home reach and local network, providing customers with a range of flexible choices for dropping off parcels and meeting growing demand for additional delivery, collection and drop-off options.’

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PayPoint chief executive Nick Wiles claimed: “Collect+ will be playing a key role in our partnership with Royal Mail. As consumer channel shift continues to move towards out of home [parcel services]), our fantastic retailer partners will now have an even greater opportunity to serve the needs of their customers in communities across the UK.”

He added that PayPoint will invest further in in-store parcel services through technology and support for its CollectPlus partnered sites.

Chief executive of Royal Mail parcel arm International Distribution Services Martin Seidenberg explained the decision to add to its existing parcel deal with the Post Office stating: “As customer preferences have evolved, Royal Mail has already opened up a variety of new ways for customers to access its services, including more online postage options through our website and app, 24/7 drop off at locations like parcel postboxes and collection from home through Royal Mail Parcel Collect.

“This partnership is an important part of Royal Mail’s strategy to make our services even more convenient for customers and to expand our Out of Home offering to provide additional locations for our customers to use our services.”

Post Office managing director of mails and parcels Neill O’Sullivan released a statement seeking to reassure Post Office branch owners. It states that ‘initially’ the PayPoint Royal Mail deal will be limited to ‘click and drop acceptance items and home shopping returns only’ but may eventually include collection services through PayPoint CollectPlus as well.

Royal Mail allegedly confirmed to the Post Office that it has ‘no plans’ to add ‘buy in branch’ services to PayPoint stores.

The statement from O’Sullivan read: “The value of our network and knowledge and experience of you, our Postmasters, means we are the first choice of network partner for many other carriers. Over the past year, we have transformed Post Office’s mails offering, introducing competitive non Royal Mail products. We have also made a huge amount of progress with the expansion of PUDO services and the launch of Parcels Online and Buy in Branch.

We have some exciting launches coming up, including being able to sell Tracked 24/48 in branch in early April, the launch of digital capture for customs information in early March and working closely with Parcelforce to improve their collection services.

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