Angry Tyro (ASX:TYR) customers jump ship

Small business clients are leaving the Australian fintech after a massive outage enters its 2nd week. See how fired up they are.

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Australian fintech Tyro Payments Ltd (ASX: TYR) is scrambling to fix an outage that’s seen many of its small business customers unable to accept credit and debit cards.

Tyro provides terminal devices that allow businesses to process end customer card payments. Last week it revealed 15% of its active terminals were dysfunctional due to a “connectivity issue”.

Over the weekend, the company revealed the fix cannot be sent out remotely. Tyro and its terminal supplier will have to collect all the faulty devices then deliver them back to customers. 

The outage, as of Monday, was into its 7th day. The company advised customers over the weekend they may not receive a working terminal until the end of this week.

Meanwhile its customers, which are mainly small businesses, are fuming at the disruption.

“Guys, what the hell. Two of my venues can’t accept card for four days. I’m expecting you guys will cover loss of revenue?” said one customer on social media.

Another business owner said a mere apology was not good enough.

“We are going bankrupt yet all you can say sorry for the inconvenience! I would like to know how you plan your business? Any business have their contingencies and backup strategies and being [a] tech company, how [are] you guys running business like this?” the customer said.

“We need compensation for all the losses!”

Tyro declined to comment to The Motley Fool on Monday.

The Tyro share price has sunk 3.34% to $3.18 at the time of writing.

Tyro customers leave and sign up with rival suppliers

Some customers have already dumped Tyro for rival service providers, like Commonwealth Bank of Australia (ASX: CBA) or Square Inc (NYSE: SQ).

“After having my Tyro crash Wednesday, Thursday, Friday I went and got a touchscreen Squarepay ($450) and have it running now,” said one former client on Facebook.

“The question is how long has Tyro known that the faulty machines needed to be manually fixed.

Another customer turned to a big bank.

“Bunch of jokers! I sat on hold for an hour then received ZERO assistance. Back to CommBank for me and my multiple businesses.”

Some small businesses have even missed payments for services provided because of the Tyro outage.

“My wife has just had her first refusal to pay from a customer ($190 cut/colour service) with [the] customer saying that it is the salon’s fault that she is unable to make payment,” said one person on social media.

“Fortunately we have CCTV footage, a name, a phone number and a possible place of work for this person. Recovery of this amount will further add to the time wasted by your service not working.”

The disruption is a major hit to Tyro’s credibility that it built up the past few years as an alternative to the major banks.

The company also took a hit last month when authorities found it sent 150,000 illegal spam email and text messages over the last 2 years.

Tyro was granted a banking licence back as a private company back in 2015, then listed on the ASX in 2019.

Some analysts had expected Tyro shares to be a major winner in 2021 as small businesses in industries like travel and hospitality spring back to life after the coronavirus pandemic.

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Returns as of 15th February 2021

Tony Yoo owns shares of Square. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Square. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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