Tyro, Australia’s business-only bank, has launched a Tap & Save initiative to help small to medium enterprises save on re-routed debit tap-and-go payments.
Tap & Save is a first-to-market program from Tyro, offering least-cost routing ahead of the government’s 1 April 2018 deadline for banks to address merchants’ demand for cheaper tap-and-go debit payments.
In December 2017, The House of Representatives Standing Committee on Economics ordered banks to allow merchants to have the option of sending contactless payments through the electronic funds transfer at point of sale (eftpos) network by 1 April 2018.
Currently, tap-and-go payments on debit cards are processed through international schemes rather than the lower-cost eftpos system, which could not support contactless payments until recently.
Thanks to Tyro’s new initiative, debit tap-and-go payments can be processed through the more economical eftpos network for eligible new and existing merchants.
“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,” says Bronwyn Yam, Director of Product at Tyro.
“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. Tyro’s commitment to delivering value to customers with Tap & Save even comes at the expense of our own bottom line.”
Least-cost routing will afford Australian businesses the choice to automatically process multi-network debit (MND) contactless transactions to the least-cost payment network. Tyro’s Tap & Save 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 customers will save on average 6 per cent on their Merchant Services Fees (MSF) and the majority of Tyro merchants will save between 20 to 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.
Tyro will price Tap & Save transactions the same as eftpos transactions to bring the best value to Australian businesses.
According to eftpos, debit cards represent 67 per cent of all card transactions in Australia, or 5.6 billion transactions a year. Of that, 74 per cent of all debit cards, or 26 million, are MND cards, featuring both eftpos and international schemes.
Tyro’s recently appointed CEO, Robbie Cooke, says he is 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,” he says.
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 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.
Currently in Australia, 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 per cent with eftpos, and 0.58 per cent 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.
For more information, visit go.tyro.com/Bean_Scene_TapSave_article