Vodafone has finally backed down on plans to cut margins on its new e-vouchers, and has admitted that retailer pressure forced its hand.
Vodafone sales director Richard Daly and Steve Elliot, electronic payment methods manager, told The Grocer that the company had been shocked by last year’s backlash from retailers and solutions providers.
They had objected to its plans to offer 0.5% less commission on
e-vouchers than with standard top up methods (The Grocer, November 22, p4).
Daly said: “When we grasped the detail at the end of the food chain, we realised that we were probably offering the lowest commission.” But the process had been a “lesson in good communication”, he added, as the deadlock over commission levels had left Vodafone unable to launch the new product.
Five of six solutions providers for Vodafone - PayPoint, E-pay,
Post TS, Alyphra and Omega Logic- have now agreed they will offer e-vouchers through their machines, and launch packs are currently being sent out to their retailer estates.
Daly reassured retailers that now that the deal had been agreed, Vodafone was “not in the game of anniversary margin reductions” and had “no agenda for change”. Vodafone wanted “good partnerships” with independent retailers, who operate up to 50,000 of the 85,000 outlets where its top up solutions are sold.
He said Vodafone was focused on taking on competing mobile networks, and added: “I don’t think margin reductions and annoying the people we sell through will grow Vodafone’s share of the top up cake.”
But he admitted that margins would be reviewed as a matter of course in a year or so in case they could be reduced to reflect efficiency gains.
Vodafone planned to have phased out its plastic-wrapped top up cards by late March, said Elliot. With its new e-voucher payment system, customers get given a code on a receipt to type into their phone.
E-vouchers, which other mobile networks are also understood to be planning to introduce, would benefit both retailers and customers, said Elliot. They had no overheads, offered 100% availability and were less prone to staff pilferage.
Customers could also buy top ups in more denominations. Instead of just £10, £15 and £25, there were eight denominations, starting at £5.
Vodafone is developing other top up channels, including cash machine top up, said Elliot.
It now tops up from around 6,000 cashpoints operated by the Co-operative Bank, Moneybox and TRM. Royal Bank of Scotland machines are about to come on stream, he said.
Anne Bruce
Vodafone sales director Richard Daly and Steve Elliot, electronic payment methods manager, told The Grocer that the company had been shocked by last year’s backlash from retailers and solutions providers.
They had objected to its plans to offer 0.5% less commission on
e-vouchers than with standard top up methods (The Grocer, November 22, p4).
Daly said: “When we grasped the detail at the end of the food chain, we realised that we were probably offering the lowest commission.” But the process had been a “lesson in good communication”, he added, as the deadlock over commission levels had left Vodafone unable to launch the new product.
Five of six solutions providers for Vodafone - PayPoint, E-pay,
Post TS, Alyphra and Omega Logic- have now agreed they will offer e-vouchers through their machines, and launch packs are currently being sent out to their retailer estates.
Daly reassured retailers that now that the deal had been agreed, Vodafone was “not in the game of anniversary margin reductions” and had “no agenda for change”. Vodafone wanted “good partnerships” with independent retailers, who operate up to 50,000 of the 85,000 outlets where its top up solutions are sold.
He said Vodafone was focused on taking on competing mobile networks, and added: “I don’t think margin reductions and annoying the people we sell through will grow Vodafone’s share of the top up cake.”
But he admitted that margins would be reviewed as a matter of course in a year or so in case they could be reduced to reflect efficiency gains.
Vodafone planned to have phased out its plastic-wrapped top up cards by late March, said Elliot. With its new e-voucher payment system, customers get given a code on a receipt to type into their phone.
E-vouchers, which other mobile networks are also understood to be planning to introduce, would benefit both retailers and customers, said Elliot. They had no overheads, offered 100% availability and were less prone to staff pilferage.
Customers could also buy top ups in more denominations. Instead of just £10, £15 and £25, there were eight denominations, starting at £5.
Vodafone is developing other top up channels, including cash machine top up, said Elliot.
It now tops up from around 6,000 cashpoints operated by the Co-operative Bank, Moneybox and TRM. Royal Bank of Scotland machines are about to come on stream, he said.
Anne Bruce
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