Why investors are watching this Payment Solutions Company - Tyro Payments Limited

Tyro Payments Limited (ASX: TYR) recently made its debut on ASX on 6 December 2019 and has been under the investor’s radar. The shares of Tyro on 16 December 2019 has reached near its 52 weeks high price. The shares on 17 December 2019, opened at a price of $3.850, achieving the day’s high at $3.870 and day’s low of $3.750, as of now. TYR shares were trading at $3.760, down by 1.053 percent (at AEDT 1:16 PM).

Tyro has a market cap of $1.89 billion outstanding shares and approximately 496.65 million outstanding shares.

Let’s know about Tyro:

Tyro Payments Limited is the provider of EFTPOS payment solutions, small business loans as well as banking products to the Australian companies. More than 29k Australian merchants opted Tyro as their partner in FY2019. The company generated above $17.5 billion in transaction value and made $189.8 million in the form of revenue and income from all of its business segments. Also, during this period, Tyro Payments Limited initiated $52.2 million in loans and maintained merchant deposits adding up to $26.9 million at 30 June 2019.

Tyro is the country’s 5th biggest merchant acquiring bank. This is based on the number of terminals in the market, after the 4 main banks.

The company was founded in the year 2003 with an objective to become the most efficient acquirer of electronic payments in Australia. TYR holds a record of innovation, being 1^st to market etc.

In 2005, TYR became the 1^st tech entity to obtain the licence (Australian specialist credit card institution authorisation). During 2015, this licence got substituted by the award - Australian banking licence. This made the company the first new domestic banking licensee across the period of around 10 years.

Tyro’s Core Business:

The core business of the company is Payments via its core technology platform in order to facilitate the acquisition of credit and debit card.

How Does Tyro Acquire New Merchants?

Tyro follows multiple channels to acquire new merchants. In FY2019, the company acquired almost 50% of its new merchant applications through digital marketing. 18% of its applications were referred by its Point of Sale system partners along with the Independent Sales Organisations.

How does Tyro Generate Revenue?

Tyro generates revenue through

• payments revenue and income
• lending income
• investments income
• other revenue and income

Tyro’s Management:

Tyro’s management comprises of executives with immense experience and expertise in the field.

Tyro’s chair is led by David Thodey AO, who has forty years of experience in the technology & telecom industries. Earlier he was the CEO of Telstra and before that CEO of IBM Australia/ New Zealand. At present, David Thodey AO is also the Director of Ramsay Health Care Ltd, Xero Limited and Vodafone Group Plc. Apart from that, he is also the Chairperson of the Commonwealth Scientific and Industrial Research Organisation.

Robbie Cooke has more than 30 years’ experience in the mining, oil and gas, online travel industries, lotteries and wagering. At present, he holds the designation of MD in Tyro. Before Tyro, he was MD and Chief Executive Officer of Tatts Group Limited.

David Fite at present an investor in numerous credit, financial services and technology companies, and since 2008 he has been a shareholder in and consultant to Tyro. He holds 25 years’ experience in the financial services industry and has held multiple positions at Westpac Banking Corporation (ASX: WBC) like Treasurer, Assistant Chief Financial Officer as well as the Group Executive accountable for all retail & business banking products in the country.

Catherine Harris AO is Director since 17 December 2015.

Fiona Pak-Poy is Tyro’s director since 4 September 2019.

Paul Rickard is Tyro’s director since 28 August 2009.

Mike Cannon-Brookes was Tyro’s director since 10 December 2009 and resigned from the position on 28 February 2019.

Rob Ferguson was Tyro’s Director since 17 November 2005 till 3 July 2018.

Recent Announcement:

Within 10 days after getting listed on ASX, the company released an announcement where it was advised by the Department of Human Services (DHS) that its tender for providing Medicare Easyclaim Claiming Services was identified successful.

The department of Human Services also confirmed that the new agreement is being prepared and will be provided within a short span of time.

The company in its prospectus highlighted about its present contract with the Department of Human Services for the provision of Easyclaim Claiming Services which is due to terminate on 31 December 2019 and is subject to a public tender procedure run by the DHS for the period beginning on 1 January 2020. It stated that the Department of Human Services pays Tyro a fee for Medicare Easyclaim claims that is processed via its terminals.

Under the terms and condition of the proposed new contract, the DHS would not be paying the company a fee for each transaction for Medicare claims processed through its terminals.

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