Tyro confirms cheaper debit contactless payments through eftpos
Offering merchants option of lower cost debit contactless payments in accordance with RBA request
Sydney, Australia, 5 December 2017 – Australia’s business bank and eftpos provider, Tyro, has announced today that it will deliver lower cost routing via the eftpos network in the first quarter of calendar 2018. Tyro said it is well on track and pilots are already in progress with some of their merchants. Tyro’s ‘least-cost routing’ pricing strategy has the potential to generate substantial savings on acquiring fees for debit contactless payments for businesses using Tyro terminals.
In response to merchants’ concerns over the mounting cost from contactless payments made on debit cards, current practice has been debated by the Reserve Bank of Australia (RBA) Payments System board. Banks are being urged to utilise challenger networks such as eftpos, since its recent upgrade to handle contactless payments, giving merchants the choice to route multi network debit transactions to the lowest cost network. According to the RBA, the average merchant service fee is charged at only 0.26 per cent on swiped debit card transactions through eftpos, compared to 0.58 per cent when debit transactions are processed through scheme card networks.
Australians are more likely to pay for something by waving a plastic card near a terminal than people anywhere else in the world. More than four in five (82 per cent) of Australian consumers are using contactless payment at least once a week.
As the only Australian bank completely dedicated to business banking, Tyro strongly supports small to medium enterprises (SMEs), designing innovative products and a better payments and banking experience for its customers so they can prosper.
Rob Ferguson, Tyro Executive Director and acting CEO, said, “Tyro has the interests of SMEs at its core and we have deep, strategic relationships with our merchants. Our plan to decrease acquiring costs for debit contactless payments through the eftpos network will be seamless for merchants, easy to enable and there will be no extra fees. This initiative is a win for our customers. Tyro will continue to be on the front foot in engaging the payments industry on issues and take a lead in change.”
Russell Zimmerman, Executive Director of Australian Retailers Association (ARA), said, “eftpos is a low-cost payment routing option for merchants, and we are pleased to hear Tyro is working to implement least-cost routing. Particularly for smaller retailers, this is a welcome move – the ability to route transactions via the eftpos network instead of the current Visa and Mastercard schemes will save merchants significant costs instead of hitting their bottom lines.”
Tyro is the only Australian bank completely dedicated to business banking and has the interests of small and medium enterprises at its core. Tyro is the first Australian technology company to be granted a full banking licence by APRA. Tyro provides eftpos, deposits, unsecured lending, Medicare and private health fund claiming and rebating services, and integrates with Xero via the Tyro App.
Tyro’s highly developed in-house engineering capability places it at the forefront of banking and payment innovation. Tyro uses disruptive technology and agile methodologies to design innovative products and a better payments and banking experience for its customers so they can prosper.
In November 2015, Tyro announced the company’s $100 million capital raise in core Tier 1 equity which was completed in March 2016 and was granted an unrestricted Authorised Deposit taking Institution (ADI) licence. In April 2017, Tyro obtained from the Australian Prudential Regulation Authority (APRA) the right to use the word “Bank” in its name and in describing its activities, and has been added to the list of “Australian-owned Banks” on APRA’s website.
Currently serving more than 20,000 small and medium enterprise merchant customers, Tyro processed $10 billion in payments in FY17 and generated more than $120 million in revenue, reflecting 26% growth, year on year. Over the past five years, Tyro’s Compound Annual Growth Rate is 34%.