Tyro Payments (TYR) Investor Update summary

RBA regulatory changes and business impact

• RBA announced a ban on surcharging for credit and debit, a lower cap on interchange fees, and increased fee transparency for card networks and acquirers.

• These changes align with prior recommendations and are seen as beneficial for consumers, small businesses, and the company.

• The business model is not dependent on surcharging or bundled pricing, limiting exposure to the regulatory changes.

• No impact is expected on short or medium-term gross profit or EBITDA margin targets.

• Cost benefits from lower interchange will be passed to merchants, maintaining margin but reducing revenue.

Competitive landscape and opportunities

• About 80% of transaction value is already on transparent, card-based pricing plans.

• The company is well-positioned to target merchants currently with acquirers using blended or surcharging-dependent models.

• Anticipates becoming a net acquirer of merchants as competitors relying on surcharging face disruption.

• Increased transparency and competition are expected, especially among price-sensitive small businesses.

• Further market consolidation is likely as smaller providers face challenges.

Financial outlook and guidance

• Gross profit margin is expected to remain stable, with any reduction in merchant service fees offset by lower interchange costs.

• Revenue may decrease due to lower fees, but dollar and percentage margins are expected to be maintained.

• Guidance for FY2025 remains unchanged; outlook for FY2026 is neutral to positive.

• No significant risk is seen to current pricing structures; transparency is already embedded in offerings.