Fintech EFTPOs provider Tyro Payments Ltd (ASX: TYR) has committed to providing the ASX market with weekly transaction value updates. In an unparalleled level of transparency, the company intends to provide weekly updates to the end of the calendar year. The Tyro share price has been trading in a sideways fashion after a V-shaped recovery between March and June.
Positive trading update
The most recent update for the week ended 13 November might be Tyro’s most positive trading update since the initial COVID-19 outbreak in Australia.
Tyro’s November transaction values have improved 15% on the prior corresponding month. This has been the greatest improvement in transaction values since February. The company’s year-to-date transaction values for FY21 currently sit at $8.222 billion or 7% higher than the $7.72 billion in FY20.
The reopening of hospitality and retail businesses in Victoria will have contributed to its improvement in transactions. More recently, indoor entertainment venues, gyms, fitness centres and more have been allowed to reopen in Melbourne. The reopening and expanding capacity of businesses combined with the recent 7-year high in consumer confidence paints the narrative of a reinvigorated Tyro business.
New alliance boost
On 16 October, Tyro partnered with Bendigo and Adelaide Bank Ltd (ASX: BEN) to provide its best-in-class payment solution to Bendigo Bank’s business customers.
This alliance will result in a full technical and economic separation of Bendigo Bank’s merchant business to Tyro. Moving forward, Tyro will exclusively provide merchant acquiring services to current and referred Bendigo Bank customers.
The formal completion of the partnership will see a combined number of terminals of 89,000 up from 63,000 pre-alliance. The alliance is structured so that Bendigo Bank sells Tyro its assets used in conducting its merchant acquiring business. It will receive an upfront consideration of $9.0 million and an ongoing gross profit share from existing and newly referred business customers. This deal is expected to be completed in the first half of CY21.
The Tyro share price jumped 5% on this announcement. It was trading at $3.98 before market halt this morning.
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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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