Tyro, which bills itself as "Australia’s business-only bank," has announced "Tap & Save," which allows merchants to "save money by processing debit tap-and-go payments through the more economical eftpos network."
The company says that Tap & Save is a first-to-market initiative offering least-cost routing to merchants, and has "launched well ahead of the 1 April 2018 deadline recommended by the House of Representatives Standing Committee on Economics (see the report "Review of the Four Major Banks (Third Report), House of Representatives Standing Committee on Economics, December 2017).
In addition, "eligible new and existing merchants will be able to sign up to Tap & Save from today."
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Tyro says its Tap & Save offering "has the potential to generate substantial savings on acceptance costs for eligible scheme debit tap-and-go payments for businesses using Tyro terminals – cutting costs for small to medium enterprises (SMEs).
"Tyro merchants will save on average six per cent on their Merchant Services Fees (MSF) and the majority of Tyro merchants will save between 20-30 per cent on re-routed transactions. Savings will vary between merchants depending on a business’ card mix, transaction volume and amount, industry and pricing plan."
Billing itself as "the champion for SMEs," Tyro says it will price Tap & Save transactions "the same as eftpos transactions to bring the best value to Australian businesses.
"The company will also surrender some of its revenue to bring Tap & Save to its merchants. With the interests of SMEs at its core, Tyro has deep, strategic relationships with its merchants and a heavy focus on designing innovative products and a better payments and banking experience for its customers so they can prosper."
According to eftpos, "debit cards represent almost 67% of all card transactions in Australia, or around six (5.6) billion transactions a year and growing rapidly. Of that, 74% of all debit cards, or 26 million, are MND cards, featuring both eftpos and international schemes".
Bronwyn Yam, Director of Product at Tyro, said, “Our aim is to remove the barriers from business success and we are thrilled to give our customers the opportunity to be the first businesses in Australia to benefit from Tap & Save. As the first-mover in offering least-cost routing to merchants, it certainly gives our customers an advantage.
“Tap & Save has the potential to provide Tyro merchants with some relief from the expense of doing business. We constantly look at how we can make banking and payments easier and more cost effective for merchants. Tyro’s commitment to delivering value to customers with Tap & Save even comes at the expense of our own bottom line.”
Tyro’s recently appointed CEO, Robbie Cooke, said he was looking forward to stepping into his new role and leading the Tyro team as it paves the way in the Australian business banking and payments space.
“I am excited to see Tyro take the lead once again by bringing least-cost routing to the Australian market before all the other banks. Tap & Save is the perfect example of how Tyro is responding to the banking needs of SMEs,” Cooke added.
Tyro noted "the use of cash continues to decline and more Australian consumers are now in the habit of tapping their card when paying for purchases. During a typical week, consumers of all ages are using contactless cards more frequently than ever before. The Reserve Bank’s fourth triennial Consumer Payments Survey (CPS) revealed that over the three-year survey period to November 2016, contactless card payments had escalated three and a half times to represent two thirds of all in-person card payments."
That detail comes from a report entitled "How Australians Pay: Evidence from the 2016 Consumer Payments Survey – Mary-Alice Doyle, Chay Fisher, Ed Tellez and Anirudh Yadav" (PDF link).
Currently in Australia, we're told that "almost all MND tap-and-go card payments revert to the international credit card schemes, instead of the eftpos network. While the outcome is the same for the cardholder, the credit card schemes typically charge the merchant more than eftpos.
"As of September 2017, the Reserve Bank shows the average total merchant fee for a debit contactless transaction was 0.26% with eftpos and 0.58% with the international credit card schemes.
"The launch of Tap & Save represents Tyro’s first iteration of least-cost routing, with further enhancements to come in future months which are expected to deliver even more savings to a larger proportion of its customer base."
