PayPoint’s recent communication outlines their plans to retire the yellow terminals and gradually introduce PPI terminals, which will result in additional cost for some existing retailers.

Retailers that currently pay £30 per month ie £360 per annum will move to a higher payment ie £520 per annum for the PP1 base, once their yellow terminal is retired.

The table below outlines the breakdown of the yellow terminal charges i.e. £10 per month for the terminal and £20 per month if retailers offer Paypoint’s card payments. When a retailer’s yellow terminal is retired the charge for PP1 base will be a weekly charge of £10. Card payments will be integrated into this cost.

End-of-life/Historic Products Current Products

PayPoint One**

Yellow terminal

Card payments

Base EPOS Core

New Customers

£20per week*

Existing Customers

£10 per month

£20 per month

£10per week*

£15per week*

PayPoint services

Broadband enabled Rapid only

Integrated card payments

Brand new touch screen device

Cloud back office

Mobile app

Store products for quick scanning

Set up promotions +shelf edge labels

*All weekly fees are billed on a monthly basis. Fees are applied on a per Terminal or per Pin Pad basis (card payments). ** PayPoint One service fee includes EPOS (depending on level selected), PayPoint services and a contactless enabled Ingenico PIN pad including Apple Pay™ and Android Pay™ to enable card payments

Pricing table (effective 1st June 2017)

PayPoint Pricing Sheet 1pp A4.indd 1 24/04/2017 11:14

Is PayPoint right for your Business?

PayPoint Pricing Table (effective from 1 June 2017).

PayPoint has confirmed that up to 15% of their retailers, do not pay the current pricing structure costs (due to historic agreements) and have been put on 30 days notice of the charges payable from 1 June 2017 ie • 3% of retailers have had their line rental paid by

PayPoint through a historic agreement.• 15% of retailers are not paying the £10 monthly

terminal charge. Retailers that currently pay up to £30 per month ie £10 per month for the terminal and £20 for debit/credit card payments will not be required to pay any further charges until their yellow terminal is retired. Once the yellow terminal is retired and retailers move across to the PP1 terminal charges, the cost will be £10 per week for the base PP1.  Retailers that wish to take advantage of the PP1 Pro (the full EPOS system) will pay additional charges. PayPoint’s Pro Version pricing table will be available in the summer period. When PayPoint provide notice to retire the yellow terminal, they will also give retailers the option to cease their contract without any financial penalties. Cancellation of the contract must be within a 60 day period of the notice to retire the yellow terminal being served.

Transparency on Charges

As part of PayPoint’s improved business terms – it has changed some clauses within its contract agreement and intends to communicate the clauses to all retailers with older contracts. Please be aware that a new 5 year contract (with a 2 year notice period) will be effective from this date. Please ensure that this term suits your future business needs.

• Introduction of a 2 year rolling notice period, which can be served at any time. (If you have signed a 5 year contract in May 2017, you can serve PayPoint with a 2 year notice of terminating the contract in May 2019, but as the date approaches, extend the contract date).

• A 60 day mutual exit clause, if PayPoint have to put prices up.

• Reduced DD fees for first time failures (£25 rather than £70).

• Low transaction fees have also been removed for PP1 retailers

You may consider furnishing PayPoint with your 2 year notice to terminate when signing the new contract.

If you are retaining the yellow terminal on the new contract terms you will be offered the opportunity to terminate when your terminal is due for replacement with the new PP1, but we would suggest that you indicate on the contract, that you have not automatically agreed to take PP1 and retain your right to terminate your contract when this occurs.

PayPoint Change In Terms

Does PayPoint play a future in Retail stores?

It is clear that PayPoint’s long term business strategy is within the EPOS industry and integrated card payments.  Perhaps PayPoint foresee (like we all do) that the future of the “top up and payment of bills service” is decreasing, due to customers and suppliers preferring more “online payments”.  Additionally with the increase in smart meters for utility payments, customers have a choice of paying via their local store or online.   

Whatever PayPoint’s business strategy, Independent Retailers need to also look at their business strategy in terms of profitability ie service portfolio, margin and additional cost to move into new technology.  

• Will your business be able to sustain the additional cost of moving to PP1 or PP1 Pro?

• Does the PayPoint service portfolio contribute towards your business profitability?

• Will CollectPlus+ profit margin help to pay for the additional cost for the upgrade to PP1?

The below information was extracted from 1,997 Independent Retailer EPOS data, with respect to the profit margin obtained from PayPoint footfall for the purchase of non PayPoint Items. It identified the number and percentage of other products purchased during PP transactions and can be assessed as to the additional benefits Paypoint may bring to your store.

54% of retailers made less than 3% of their profits from non-PayPoint items contained within PayPoint transactions during 2016.This is BEFORE other costs relating to PP are taken into account.

77% of retailers using PayPoint make less than 5% of their profits on non-PayPoint items bought in PP transactions.

This statistical data has been checked and verified by an independent analytical statistician.

Method of Calculating The Profit Related To PayPoint Transactions:

1. Select all PayPoint transactions

2. Discard those transactions that contain only PayPoint items.

3. On the non-PayPoint items in the transactions

a. net off the VAT portion of revenues on VAT-able items

b. use the costs of these items to work out actual profit

c. Where a cost is not available, use a notional 20% profit

4. Calculate the overall profit generated by non-PP items in all transactions

5. Work out what percentage of the store’s remaining (all non-PayPoint revenue) is represented by the profit calculated in 4.

This profit calculation STILL does not take into account:

• Cost of banking additional cash taken on PayPoint transactions

• PayPoint’s structured pricing charges

• Any losses caused by operating mistakes by staff in store

• All other business costs ie PCI DSS, data protection registration, minimum living wage, auto pension enrol, NIC employee contributions, insurance cover for the receipt of money, rates, rent, business consumables.

This method has been checked and verified by an independent analytical statistician.

What Retailers are Saying

• Numerous retailers employ the Paypoint service from a footfall perspective and it works in terms of purchasing other products to help with the overall business profitability.

• Countless retailers are not happy with the margin and the costs

associated with Paypoint but believe Paypoint adds to the full service it offers its customers and are prepared to continue with the service.

• Several retailers make a profit from Paypoint service whilst others make a loss.

• Scores of retailers have cancelled their contract with Paypoint and report their business continues to thrive to the same levels of profitability.

• All retailers want Paypoint to offer a better commission across the service portfolio

• Retailers do not want additional business costs from Paypoint.

• Some retailers surcharge and many others are considering same, for Paypoint services, but this is in breach of Paypoint terms.

Retailers that wish to exit their PayPoint agreement, due to the retirement of the yellow terminals and introduction of PP1, can serve PayPoint 60 days notice of their intention to terminate their contract by emailing notice@paypoint.com or write to the Network Management team, PayPoint, 1 The Boulevard, Shire Park, Welwyn Garden City, AL7 1EL. Retailers that have received communication from PayPoint at the end of April 2017 should serve the notice no later than 31 May 2017.

Should you decide to finalise your contract – there are options in terms of: • Debit/credit card service• Parcel service Please contact the NFRN for more information.

Should you wish to terminate your contract

NFRN Connect: 0800-121-6376 We do so much more - visit our portfolio at: www.nfrnonline.com