A payments firm used by parents to pay for school-related expenses has faced criticism for charging £10 fees to withdraw the remaining funds in parental accounts, following its exit from the market. Squid, utilized by 600 UK schools for managing payments, discontinued its service in March after previously announcing the closure of these accounts in February.

Parents have expressed their dissatisfaction in multiple forums, including complaints to Guardian Money over the charges imposed by Squid. The company has defended its actions, asserting that the fees are consistent with their terms and conditions, but has not disclosed the total amount of money left in the accounts or the total earnings from the £10 fees.

While Squid initially offered online accounts for parents to manage payments for school meals and outings, citing economic conditions as the reason for its market withdrawal, this decision affected between 180,000 and 200,000 students. The company’s terms and conditions stipulate that a £10 administrative fee will be charged for each withdrawal from a Squid account with a minimum balance of £10.

Concerns have been raised regarding the impact of these charges on families experiencing financial hardship and the applicability of the terms and conditions now that the service is no longer available. Adam Smith, Squid’s founder and CEO, explained that the company is closing its school payment service as it is unsustainable.

Squid is currently focusing on providing payment technology to humanitarian organizations in Africa.

Source: https://www.theguardian.com/money/2025/mar/27/school-dinner-payment-app-squid-criticised-refund-fee