Alternative utility payment system may be floated

Click to follow
The Independent Online
Investors in PayPoint, the computerised utility bill payment system launched yesterday, are considering floating the business on the stock market when the company completes its investment programme.

The news emerged as the first computer terminals started operations, allowing customers who normally settle their bills in cash an alternative payment system to the Post Office or the high street banks. PayPoint is targeted at six million households which pay some or all of their utility bills in cash, with many on pre-payment meters.

The aim is to provide a PayPoint terminal no more than a mile from any household in urban areas or within five miles in rural communities. Customers hand over the cash and are given a receipt, which utility companies accept as proof of payment.

PayPoint is investing pounds 35m in the system, which will be available at 7,300 retailers across the UK. More than half the company, which was formed last year, is owned by Centrica, the demerged British Gas supply business, and British Telecom. Other shareholders include Severn Trent Water and the BBC.

The service is free to customers, with PayPoint charging a small, undisclosed, fee to the utility companies for each transaction. "We are cheaper than any form of competition," said Dick Horsnell, chairman. The launch began with terminals going live in London. Other areas of the country will follow by the end of the year.

Mr Horsnell admitted to being disappointed at the lack of interest in the service from regional electricity companies, although London Electricity was a founder shareholder and Northern Electric and Norweb had both agreed to join.

He confirmed that shareholders were interested in floating the business, although it was unlikely to happen until 2000 at the earliest. Some 24 per cent of the company is owned by employees.