Ann: Sale of NZ business and assets, page-40

I wouldn’t normally do this, but you are by far the most generous poster on HotCopper so...

1) acquiring by non-banks only allowed the a couple of years ago
2) strict surcharge laws make it very difficult for SMBs to properly charge customers according to cost
3) current pricing structures (mainly banks) extremely confusing
4) of non-banks Tyro definitely the biggest
5) smart pays smartcharge is the only free product, no other meaningful competitors. Only tyro and smartpay to my knowledge integrate with Alipay etc.
6) smartpay also has impeccable customer service

there are two tailwinds:
- government is pushing for everything to go cashless and consumers also favour it, so lots of businesses moving away from cash as is % of transactions that are cash
- there is a change in market share away from banks to new players.

They have 12m revenue from 10m 2 months ago, and have surpassed their own goals. I am pretty sure the product sells itself for the above reasons. They have 4K terminals for that revenue and they had targeted 6K terminals in action previously, I think they can do more given the loss of capital constraints and focus.

it took smartpay about 18months to properly rollout this system, I think they can get to 20-30K terminals out there before competition heats up but as the product is free I believe switching costs will be high. The market size is over 1m terminals so even this would be a very small dent. 25K terminals is about 60m in revenue and 30m in EBITDA.

I seriously can’t believe the price action...it’s like people have focussed completely on the wrong announcement yesterday...in my opinion this is dirt cheap.

Documents:
RBA rules on surcharging
Smartpay blog- customer success stories and smartcharge product
Tyro AR has particularly good background and probably the prospectus (which I haven’t read).
The older announcements lay it out pretty well from SMP.