Fintech firms Afterpay and Tyro have announced a partnership that will have Afterpay’s deferred payment product provided to several thousand small businesses using the latter’s EFTPOS terminals.
Tyro Payments, Australia’s first independent EFTPOS provider, has been granted a general banking authority by the Australian Prudential Regulatory Authority that allows them to take money on deposit and to advance money to Australian businesses. This is the first time a challenger has been authorized to compete head-on with the banking establishment.
The country’s point-of-sale, practice management, accounting or other business software vendors can now enrich their solutions with the benefits of integrated banking features. This will make processing payments, managing deposits and funding the business easier.
Sydney-based Afterpay was built on an industry-based technology platform, in its mission to provide simple, interest-free installment plans that are available instantly at retail stores— either online, on mobile, or in-store. Founded in 2014, the company currently has over 375,000 customers and is offered by over 2,100 merchants and the company has been expanding into retail sectors, broadening its customer demographics.
The partnership will allow Tyro to strengthen its relationships by integrating Afterpay’s service with software systems that will help customers increase sales. The deal will enable Afterpay to reach small businesses, lifting the merchant fee revenue, and opening up new markets.
The commercial terms of the deal have not been revealed yet. However, Managing director Nick Molnar describes it as “an extremely mutual beneficial relationship for both parties.” The company said it had been receiving a strong demand from its existing online retail partners to integrate the Afterpay payment platform into their physical retail store networks.
Gerd Schenkel, chief executive of Tyro and previously head of digital at Telstra, said merchants want more value-added services from suppliers and “being both a bank and tech company, we can do more for them than what we have traditionally done with payments. The banking license and funding raised last year gives us the ability to take advantage of that opportunity.”
