Decision by DWP aimed at benefitting local retailers as well as benefits claimants

Decision by DWP aimed at benefitting local retailers as well as benefits claimants

PayPoint, the UK branded cash payments network, has welcomed today’s announcement from the Department for Work and Pensions (DWP) that PayPoint has been named preferred supplier to be the retail payment network for the new service which is to replace green ‘Giro’ cheques for cash benefits.

The service will be delivered together with the DWP’s selected banking partner Citibank, whom PayPoint said it understands the DWP will ask to act as prime contractor.

This service will build on PayPoint’s ability to pay out cash through its retail network, which has proven attractive to both clients and retail agents since it was launched last year.

It is intended that this service will be delivered across the full range of benefits for customers who do not have bank or Post Office card accounts. Similarly to the cheque payments, which are being replaced, customers will be supplied with a document to confirm their entitlement that can be cashed in a PayPoint retail outlet, but this is the first time that PayPoint has provided a service to the DWP.

Part of strategic growth ambitions

As this is a new service, volumes are difficult to predict. PayPoint expects to spend most of next financial year preparing for the start of the service, for which the DWP will pay set up fees. Thereafter, revenue should accrue to PayPoint’s established business, helping maintain the growth forecast by the market.

Dominic Taylor, PayPoint chief executive, said: “We are delighted that the breadth, quality and efficiency of the PayPoint retail network has been recognised by DWP and look forward to working with the Department to deliver this very exciting and socially important initiative.

“The retailers who make up our network work incredibly hard to provide their service at the very heart of their communities, opening from early morning to late at night, seven days a week, including bank holidays. The proposed new system for cash payment of benefits through our network will make it far easier for the recipients to access their own money at locations and times that are more convenient for their circumstances and lifestyles and builds on their trust in the PayPoint brand and service, which millions of cash economy consumers use every week for their essential payments.”