PayPoint is set to increase its monthly fee by 7% starting in April, but will be absorbing the “additional cost” caused by inflation to protect partnered stores.

In a letter from the firms customer experience director, Ben Ford sent to stores today and seen by Better Retailing, retailers operating a base service will see their weekly price rise by 75p, from £10.80 to £11.55, equating to a £35.36 yearly increase.

It went on to state the retail price index (RPI) was confirmed at 13.4% on 15 February, but that “it wouldn’t be right or appropriate to apply this in full,” and as a result, it will again “cap it for this year at 7%”.

PayPoint cited rising product prices, delivery charges, wages and utilities as reasons for why it wanted to protect retailer partners from the “full extent of these increases”.

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The change will take effect from April and retailers can expect to see this reflected in their statements from 1 May.

Those retailers with a base service and additional unit will see a yearly increase of £35.40, followed by £39.36 (PPoS), £78.60 (core), £53.04 (core additional unit), £59.04 (core legacy promo), £117.96 (pro), and £53.04 (pro additional unit).

A spokesperson for PayPoint told Better Retailing: “Every year, we review service fee prices in line with the RPI, which was confirmed at 13.4% earlier this month. Consistent with our approach last year and given the broader cost pressures for our retailer partners, we feel it wouldn’t be right or appropriate to apply this in full. Therefore, we have listened and consulted, and have again taken the step to protect our retailer partners and cap it for this year at 7%, with PayPoint absorbing the additional cost.

“Over the past 12 months, we have significantly enhanced our retailer proposition to drive more value and sales. Total commission paid to our retailer partners has grown by over 25% year on year, with over half of our partners increasing their commission by more than last year’s RPI increase. We remain committed to working closely with all of our retailer partners to help them take advantage of new services and opportunities to earn in their store from PayPoint.”

The Fed’s national president, Jason Birks, said: “Everyone is operating in an increasing challenging environment with costs rising on a daily basis and this is threatening the very survival of smaller stores and their communities. A 13.4% increase to PayPoint’s service fee charge would have made our lives so much harder.

“At every meeting with PayPoint we lay bare the challenges facing independent retailers and while we are disappointed that its service fee is to rise, we are grateful that PayPoint executives have listened to the Fed’s concerns and the company is, at least, absorbing some of the increase.”

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