Aggregators warn that the extra cost could be passed on to brokers, while software house claims new service is value for money.
Software provider Open GI came under attack this week for a new scheme that charges price comparison sites £1 for every transaction made with a broker.
Price comparison sites have warned that this charge may be passed on to brokers, who could have to pay up to £3,000 per month, depending on how many transactions they make on the sites, also known as aggregators.
But Open GI claimed it had simply developed a new business model that provided good value for money.
The leading software provider has already suffered controversy this year for raising the fees it charges insurers for personal lines transactions. Now it is in tough negotiations with a number of its price comparison site clients about the new technology, which improves the efficiency of the system, but entails more costs.
The new technology allows price comparison sites to access quotes from numerous brokers simultaneously, bringing time and efficiency savings for both parties.
Price comparison sites are charged a one off-fee of £500 for each broker they access, plus £1 for each transaction completed.
Open GI said it was aware that the £1 transaction charge had been passed onto brokers in a number of cases.
One senior source at a leading comparison site said: “Our pricing structure is fairly straightforward. For every sale we make, we get a fee [from the broker], and that fee is give-or-take the industry average of £40.
He added: “It just seems to me [Open GI] is trying to get a slice of £40 for doing nothing.”
Open GI sales and marketing director Simon Hughes defended the new technology, saying that price comparison sites and brokers were not being forced to use it, and that it had significant business advantages.
He added: “We are providing a service that we believe represents excellent value for money. I would counter that price comparison sites are trying to justify passing on the costs [to brokers].”
Hughes added that six price comparison sites had already signed up to the new service, and said Open GI was in negotiations with a number of others.
Gocompare.com has confirmed it has taken up the new service, and Moneysupermarket.com confirmed it was in talks with Open GI.
Other software houses are thought to be using similar technology, for example CDL which has a Black Box offering.
CDL said the transaction fees and arrangements for this system were confidential.
