A year after its FinovateSpring debut, Australia’s business-only challenger bank Tyro has introduced Tap & Save. The solution enables merchants to process debit tap-and-go payments through the more economical EFTPOS network, bringing least-cost routing and greater savings to Australian businesses.

“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,” Director of Product at Tyro Bronwyn Yam said. “As the first-move in offering least-cost routing to merchants, it certainly gives our customers an advantage.” In a statement, Tyro said that merchants using Tap & Save will save on average six percent on merchant service fees (MSF) while the majority of Tyro merchants will save between twenty percent and twenty percent on re-routed transactions.

(Left to right): Tyro’s Caitriona Kely and Christopher Logan demonstrating the company’s Smart Growth Funding lending product at FinovateSpring 2017.

Tyro announced its initiative to provide lower cost routing via the EFTPOS network back in December, directly targeting merchant concerns about rising costs from contactless payments made with debit cards. The company cited a report from the Reserve Bank of Australia that noted that the average merchant service fee is charged at 0.26 percent on card transactions via EFTPOS, compared with 0.58 percent when the same transactions are processed through scheme card networks. This, combined with the observation that Australian consumers are especially frequent users of contactless payments (more than four in five using contactless payments at least once a week), helped spur Tyro’s decision to provide the lower cost service by the first quarter of 2018.

“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,” Tyro’s Rob Ferguson, Executive Director and Acting CEO said.

The decision was also likely driven by a directive from Australia’s House of Representatives Standing Committee on Economics which called on banks to give merchants the option of sending contactless payments through EFTPOS network. Tyro’s announcement before the April 1st deadline makes the bank the first to comply.

Tyro began the year with news of a new CEO. Robbie Cooke, former Managing Director and CEO of Tatts Group, will take the helm at the bank at the end of March. With a background in Australian customer-centric and technology-driven businesses, Cooke guided Tatts Group through its merger with Tabcorp last December. “I believe Tyro is very well positioned with its proven track record and custom-build technology platform to better respond to the banking needs of Australia’s SMEs, which are the backbone of our economy,” Cooke said.

Headquartered in Sydney, Australia, Tyro demonstrated its Smart Growth Funding lending solution at FinovateSpring 2017. The challenger bank provides integrated payment, deposit, and unsecured working capital solutions for more than 20,000 SMEs, and collaborates with more than 200 POS providers and cloud accounting platforms to bring better banking solutions to small businesses. In its fiscal year 2017, Tyro processed more than $10 billion in payment transactions, generating $121 million in revenue. With a compound annual growth rate of 34% over the past five years, Tyro has more than $100 million capital and reserves.