School dinner payment app criticised for £10 refund fee

A payments company that was used by parents to pay for school dinners has drawn criticism for charging them £10 to withdraw the remaining funds in their accounts after it pulled out of the market. Squid, which was used by 600 schools around the UK to take payments, stopped its service earlier this month after announcing in February that the accounts would be ending. Readers have complained to Guardian Money and on online forums about the charge. Squid has defended its actions, saying the charges are in line with terms and conditions, but has refused to reveal how much money is left in accounts or how much it has made through the £10 fees. The company provided online accounts where parents could pay for school meals and trips but said last month it was pulling out of the market because economic conditions made that part of the business unsustainable. It provided accounts for between 180,000 and 200,000 children in primary and secondary schools. The Squid terms and conditions tell parents they can only withdraw money from their account if there is a balance of at least £10 and there will be an administration fee of £10 per user “for refunding stored value from your Squid accounts”. One reader who contacted Guardian Money said the charges would affect people who were struggling financially. Another questioned how the terms and conditions can still apply even though the service was stopped. Contributors on the Mumsnet forum have also complained about the fees and their fairness. Adam Smith, founder and CEO of Squid, said: “We run a business and we have costs. We are leaving the market because we cannot make money. We are unsustainable and we’re having … a very orderly exit. “We have a set of terms and conditions and we’re absolutely correct and entitled to exercise our terms and conditions.” Smith said the “vast majority” of accounts had no money left in them as they had been run down to zero. He could not put a figure on how much remains in the existing Squid accounts. He said any outstanding funds would remain in accounts until it is claimed. The company is still operating and provides payment technology to humanitarian bodies in Africa.