Goldman observes that the direct impact on Tyro’s lost merchant fees should be “relatively immaterial”. However, the impact on potential lost revenues for its merchants “could be material” and estimates a loss of “$57.5 million to 230 million”, assuming merchants are not able to find an alternative basis to process sales.
"Tyro has said that once connectivity is restored, it will be in a position to consider compensation for customers and other options.
Alongside this, Goldman is also concerned about the possibility that merchants may churn to alternative service providers regardless of compensation received. The broker cited that on social media, several merchants indicated they bought a Square terminal as a workaround.
Furthermore, the report fears that future market share gains may slow as a result of reputational damage and delayed/lost opportunity for future partnerships such as its partnership with Bendigo and Adelaide Bank Ltd (ASX: BEN)."
TYR Price at posting:
$2.32 Sentiment: None Disclosure: Not Held
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