PayPoint Shops don’t know how to process cash deposits

I think it would be quite easy to be blindsided by the PP offering, it’s longevity etc

Well trained staff (lies).
Massive reach in both rural and urban areas.
Potentially lower fees then PO.

Once the code is in place and you’ve ran it at a few places you’d be safe to assume it’s good to go.

It hasn’t worked out that way, but I can quite easily see how the process came to be.

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To test it they would need to have already set it all up and went into a contract with PP. It’s wouldn’t really make sense to go though all that work just to scrap it. I’d imagine their contract is for a year at least so maybe after that they can try something different.

Having a small scale trail could have worked to get some feedback first but there isn’t a whole lot Monzo can do with the feedback other than pass it on to PP. Monzo have said they were going to send a postcard to the retailers with info on how to process deposits but I don’t think that’s happened yet.

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I have a small newsagent/ convenience store, I would love to convert my Pp customers but my store is in a small town, we have a Tesco, Lidl, Aldi and M&S simply food within 5 mins walk, also we are edge of town location. Very hard to compete with these guys. Also las year one petrol station dropped PP and the other only offers certain PP facilities, when their machine works. We are also close to council buildings where you used to be able to pay rent and council tax. Guess where they come now. I guess it’s all about your location and type of store but why should retailers have to subsidise a service so they don’t make losses. We sell no other product at a loss. If all our suppliers had the same philosophy we would be bankrupt.

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Very difficult to convert customers due to size of shop, location etc. But the main point is why should retailers have to provide a service that makes them a loss. I can’t sell products at a loss. Why should a retailer have to rely on the customer buying other products, the Pp product should pay its way. PP have retailers over a barrel and they know it.

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Why did you sign with PayPoint in the first place? Have the economics gone bad, or were they always bad and it was a good sell?

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We took on PP as it was already in the shop when we purchased it, they have year on year reduced the commission and put a cap on most of the services. We carried on with them as we are in an area where a lot of customers use electricity keys, commission on these is currently 0.5% but capped at 7p. When we started with them I do remember phone top up used to provide between 7 to 10 % commission now it’s 0.5 %. The introduction of large payments such as TV license, rent and bills cost us dearly. ( a £400 rent payment costs £2.80 to bank, we earn 10p commission) That combined with banking fees increasing is crippling for small shops. PP earn millions and they are not playing fair. Many PP retailers are trapped in contract with long notice periods also. PP know they have a unique product and have no major competitors they also rely heavily on their take which is PP customers buy more in store. But why should we have to mark up other products to cover our PP costs. No other product works like this.

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Fascinating insights, thank you very much.

What’s the deal with card payments? My local newsagent/convenience store takes cards but processes them through their PayPoint machine.

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Have you looked into cash recycling, perhaps by offering an ATM or up-selling cashback? I’m not an expert in this (although I do work in the cash industry) so forgive me if this is a rose-tinted suggestion.

The NISA next to my work has a free to use cash machine. Speaking to them about it, I found out that they use their cash takings from the store to restock the ATM themselves (thereby disintermediating the business bank, so no 0.7% cash deposit fees to pay), and then they also make an interchange fee from the banks when dispensing the cash to customers.

So ideally a customer comes in and withdraws £100 earning the shop around 10p from the ATM network, they then pay in the same £100 earning the shop around 10p from paypoint, and then ideally the customer will buy other things to take it way upwards from that 20p margin.

I realise it’s probably not that simple, especially if it’s a quieter location or like you said, there is a lot of competition around, but surely retailers must be making money using paypoint or else why would tens of thousands of them be paying them money every month to rent the terminals?

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Sadly due to there being three banks with atms within a few hundred yards an atm wouldn’t work for us, we do cash back but it doesn’t amount to much. As to why others stick with paypoint it’s either that their customers do actually buy more goods, bigger stores with more to offer or they have never actually sat down and done their sums.

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The new paypoint one machine can be set up to process card payments but last I looked their transaction rates aren’t very competitive. And the rental for the machine is £10 per week I have the old paypoint box machine.

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Thanks for your input on this thread @Paypointretailer

In equal measure enlightening and horrifying

Provides an interesting background to the BuT cASh DePOsIts ShouLD Be FReE points on some other threads

Sounds like Post Offices are also facing their own challenges making this work with current pricing, though starting from a different position

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:joy: - Made me chuckle.

On a more serious note though, I think you’d be hard pushed to convince the masses that cash deposits shouldn’t be free.

The people inside the FinTech bubble who can appreciate the costs from PP etc, will (should), understand why there is a charge for cash deposits.

But in the same way people didn’t care when GPS used to go down (or still goes down with other banks etc) because, the end user shouldn’t have to concern themselves with a third party integration, and it really comes down to how the bank handles it - The same applies with cash deposits (in my eyes).

People generally see banks as these big, money sucking, faceless corporations, that no one is going to feel sorry for them that they incur a fee or two (just my opinion of course).

Personally, it’s becoming much harder to recommend the challenger banks anyway, as the legacy banks are catching up with a lot of the features, and the hassle for most people outweighs the benefit of what Monzo, or others, can offer.

When you add in things like paying to deposit cash, even if they will barely use it, it’s another reason not to switch over.

Whilst the legacy banks cater for far more customers, there will still be a strong argument that Monzo should do everything they can to “take it to the big boys” - Even if that isn’t feasible, the argument will remain.

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Bingo!

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I would much rather pay a £1 fee to deposit money in a shop that is a 2 minute walk away than have to drive 15 minutes to go into the highstreet to the neatest branch, that won’t be open after 5 and (obvioulsy) closed on bank holidays.

Do other people not think that the convenience is worth a quid?

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You can deposit cash into many bank ATMs for free, no need to visit a branch.

If they used a competent service… maybe. But paypoint no thanks.

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No, where I work has no PayPoint but five different banks. I’m also lucky that my local town has a Barclays and Post Office too.

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I’ve never actually used or seen one of these. Maybe they just aren’t a big thing in my part of the UK.
Had a quick google and apparently my legacy bank only has 3 of these in the whole country.

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I suppose everyone is in a different boat
I live in a rural-ish area and the closest PP is about 2 mins away, closest PostOffice is about 10 mins away and closest bank is about 20 mins away.

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It depends on the bank but as with everything look for a bank the suits your needs. There are banks with lots of cash deposit ATMs, plenty with cheque imaging or no fee cash deposits and high interest savings etc.

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It’s standard for that bank’s branded ATM (e.g. you can deposit with a Halifax ATM if you have a Halifax account, Barclays if you have a Barclays account, etc), but is not cross-bank.

There is an cross-bank deposit scheme run by by LINK, but I’m not sure of anyone who has implemented it.

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