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Tyro By Name, Tyro By Nature

tyro [noun]: a person who is just beginning to learn something or who has very little experience of something

January 15, 2021 – Viceroy Research is short Tyro Payments Limited (ASX : TYR). Tyro is the 5th largest merchant acquiring bank (by number of terminals) in Australia, behind the four major banks ($NAB, $CBA, $WBC, $ANZ). Since its IPO in late 2019, Tyro has singled itself out as the most unreliable & technologically inferior fintech in Australia.

Over the last week, our research suggests Tyro has “bricked” (verb: to turn into a brick)  ~50% of its terminals across the country via a software patch, which requires a recall and capital-intensive terminal repair/replacement. It has no disaster recovery plan and has left businesses, including medical facilities, without any means to collect payment from customers.

Viceroy Research believes Tyro presents a limited-risk short as customers churn in record numbers to vastly superior, non-archaic payment solutions providers, which are available in abundance, and immediately. Tyro presents no real catalyst to make a jump into profitability.

Despite being in operation since 2003 Tyro is increasingly loss making and floats its operating cash flows through customer deposits in its banking division.

We believe Tyro presents significant downside

The company’s financials are unappealing, and their undifferentiated and outdated product offering is in stark contrast to fresh market participants. The reputational and financial fallout from this outage will likely be severe and long-lasting.

Investors should demand an independent investigation into the issues surrounding Tyro’s “bricking” of merchant terminals, together with a review of intenal controls.

Edit: We note there was a typo on the date of this blog post. This has been amended to reflect the correct year: 2021. We have not made any changes to the report itself.

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