Tyro expects to take a minimum $19 million hit from a payment terminal outage this year that impacted one-third of all merchant customers.
The company’s CEO and managing director Robbie Cooke told the company’s half-year results that the prolonged outage “did not sit comfortably” with Tyro and its executive team.
He called on impacted merchants to register their financial losses with Tyro; the company estimated these could run to around $15 million, though it noted that “ultimate exposure could differ”.
Cooke also said that Tyro would provide all merchants with a new back-up option that could be used in the event of any future service interruption.
“This will see us provide all our merchants with a dongle solution in combination with their standard terminals as an extra level of redundancy – this is an industry first move," Cooke said in a statement.
In addition to costing merchants around $15 million, the terminal outages also cost Tyro $3 million in "direct logistics and staff costs", and $1 million replacing "obselete" terminals that were impacted and could not be revived.
Cooke said that Tyro's "first priority over the next six months is to do all that we can to rebuild trust with those of our merchants impacted by the terminal connectivity issue".
Tyro first reported the outage to the ASX in early January, citing an issue that existed in certain versions of Tyro's payment terminal that disabled transactions and remote updates.
It eventually halted trading mid-January causing an 11.8 percent drop in share prices plus scrutiny from financial research group Viceroy.
Cooke said Tyro had "not seen any material changes to our normal churn rates” as a result of the problems.
However, more is likely to be known in mid-2021 when Tyro reports the full financial impact of the outage in its second-half results.
Before the outages hit, Tyro reported $12.1 billion in transactions and a gross profit of $61.2 million for the first half of the financial year.