Class action talk as Tyro eftpos outage leaves small business stranded

Left without eftpos since January 5, thousands of small businesses could be stuck for at least another week, and they’ve called in the lawyers.

A software problem has left Tyro eftpos customers stranded for more than a week. Picture: AAP

Embattled payments technology company Tyro is facing a potential class action over its Eftpos terminal outage that has forced thousands of small businesses to accept cash-only transactions while it scrambles to remedy a software issue.

Class Action law firm Bannister Law on Wednesday said it was investigating potential claims from businesses that had been unable to accept Eftpos payments since the outage began on January 5.

The law firm is also considering at any potential shareholder claims against the ASX-listed company following its 14 per cent share price fall since it revealed a number of its terminals had become “bricked” from a “configuration issue”.

The potential legal action was flagged hours after the under-pressure fintech revealed that 30 per cent of its more than 32,000 merchants had been affected by the outage.

Tyro last week told shareholders that around 15 per cent of its merchants had been affected but that figure had doubled by the time it released its latest update to the market on Wednesday.

Tyro shares were rocked by the threat of legal action, dropping 2.6 per cent in afternoon trade after earlier rising as much as 2 per cent.

Of the close to 10,000 merchants affected by the outage, more than 6000 are without a working Eftpos terminal, while the remaining affected merchants have at least one functioning unit allowing them to continue to process payments, the company said.

The remaining 70 per cent of Tyro’s merchants have been unaffected by the incident, which was sparked by software installed on Tyro’s Worldline terminals that caused some to lose connectivity with its network.

Tyro CEO Robbie Cooke. Picture: AAP

The manual process required to remedy the issue is also slowing progress, as Tyro is forced to collect, repair and return affected terminals to each merchant.

Approximately 2000 terminals a day are being collected, with Tyro estimating it will take until the end of next week before all are back up and running.

The payments operator said it expects the majority of impacted merchants to be back to normal operations by the end of this week.

“For the avoidance of doubt, the issue is contained and at no time was the security of the terminals nor merchant data compromised,” Tyro said.

Tyro is the fifth-largest provider of Eftpos terminals in Australia, sitting just behind the big four banks. It debuted on the ASX just over a year ago at $3.38. In afternoon trade on Wednesday it was trading at $2.82.

Before Tyro was hit with the terminal outage, in a dismal start to the year, the company had seen solid growth through 2020. Spending across its terminals jumped more than 20 per cent over the year compared to 2019 as Australians splashed out through the pandemic.