Payzone has backed down from imposing new contracts on retailers after the legality of the move was questioned.
Last week solicitors representing the newsagents federation, the NFRN, wrote to Payzone challenging the legal basis of its attempt to impose new contracts on retailers.
NFRN said the new contracts significantly change the retailers terms and conditions and affect fees, access rights and data sharing. The new contracts also impose a new three-year contract with no option to exit without penalty.
NFRN chief executive Paul Baxter said: “These contracts amount to one of the most egregious attempts to impose unfair contracts on retailers that I have seen in more than 35 years working in the retail sector.
“The NFRN has taken advice from Counsel and believes that Payzone are improperly trying to use the current contract’s right to vary the contract unilaterally in some ways and are infringing the Unfair Contracts Terms Act 1977 in doing so.”
Rupert Lowery, chief commercial officer of Payzone, responded: “Payzone has invested £10m in upgrading our retailer technology, allowing merchants to improve the range of services they can offer and increase footfall, with more robust security.
“We’re pleased to say that we’re providing this at a market-leading price, which we believe will help drive competition and choice.
“During our initial roll-out of the new technology, a small proportion of our merchants as well as the NFRN raised some points with us about the new terms and conditions we’re offering. We’ve listened to this, and are going to contact all of our customers and offer them the chance to get back in touch if they don’t want to extend their contracts.
“We know it’s important to get this right. We are proud to be offering the latest technology at such a competitive price, and we’re thrilled with the feedback we’ve had from most of our customers so far.
“We will soon meet again with the NFRN to provide an update, and we share its interest in ensuring our customers’ needs are met.”