Tyro sinks as RBA floats proposal to scrap EFTPOS surcharges

ASX-listed EFTPOS machine distributor Tyro Payments (ASX:TYR) has been down -13% in early Tuesday trades after the Reserve Bank floated the idea of scrapping EFTPOS surcharges nationwide.

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According to an RBA release following an issues paper in late 2024, the bank on Tuesday stated that Australians collectively spend $1.2 billion on surcharges every year.

(Think the 0.1% surcharge common on many OTC transactions.)

“Surcharging is no longer achieving its intended purpose of steering consumers to make more efficient payment choices … avoiding surcharges has become harder as cash usage has declined,” the RBA wrote – suggesting the central bank is zooming out and looking at a long-term story, here.

“Businesses are increasingly charging the same surcharge rate across debit and credit, and there are significant challenges with enforcing the current surcharging rules.”

In the background, the proposal to scrap surcharges comes, of course, at the same time as the cost of living crisis. While the pace of inflation growth is slowing, the last five years’ cumulative impact of inflation remains baked in, and wages haven’t grown in turn.

The bank also argued that businesses would be saved $1.2 billion in interchange fees each year, staying “around 90% of Australian businesses are estimated to be better off” if the ban goes through.

But Tryo might not be one of those businesses.

The calculus is fairly obvious: Tyro makes money on transaction fees.

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So far, the financial company has not released any information providing clarity around how badly it would or wouldn’t be impacted, and what the changes may or may not do to guidance and/or outlook.

But the Oz market has taken the front foot early, with nearly $4 million worth of shares trading hands in the first hour of trade.

TYR last traded at 83cps.

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