Why fund managers are split on Tyro Payments despite a cheap valuation
RBA reforms ending card surcharging are seen as a net positive for Tyro Payments, but managers disagree on whether that resolves the stock's competitive risks.
30 Jun 2026 · 6 min read
In short
The RBA's reforms ending card surcharging from October 2026 and capping interchange fees are viewed by several managers as a net positive for Tyro Payments.
Jencay Capital calculates Tyro trades at an EV/Sales multiple of just 0.7 times against three-year historical sales growth of 14%.
Tyro shares have repeatedly risen and fallen on takeover speculation, with multiple unnamed parties reported to have expressed acquisition interest since August 2025.
Merchant payments provider Tyro Payments has moved between takeover speculation and regulatory tailwinds through 2025 and 2026, with DMX Asset Management's May 2026 Monthly Report noting the shares recovered 21% as market speculation again turned to potential corporate activity, after a period of pressure tied to uncertainty over the RBA's planned end to card surcharging.
Regulatory reform seen as a net positive
Tamim Funds Management's March 2026 Monthly Report detailed the RBA's landmark reforms ending surcharging on debit, prepaid and credit cards from October 2026 and capping interchange fees, arguing the changes play to Tyro's strengths in vertical, technology-driven solutions and clear pricing, since Tyro is not an issuer and therefore does not face margin erosion from lower interchange caps. Jencay Capital's March 2026 Quarterly Report calculated Tyro was trading at an EV/Sales multiple of just 0.7 times against a three-year historical sales growth rate of 14%.
At 4x EV/Ebitda and more than 25% of the market cap in net cash, TYR is materially undervalued.
— Tamim Funds Management, Monthly Report, March 2026
Not every manager is convinced the reform tailwind changes the takeover calculus. Wilson Asset Management's May 2026 Article rated the stock a sell despite acknowledging it looked cheap, arguing competition remains the bigger risk and that the board should have sold the business years ago when it had the opportunity. Forager Funds took the opposing view in an April 2026 Presentation, noting the RBA review had come out friendly to Tyro given most of its customers already absorb payment costs rather than relying on surcharging, unlike some competitors.
What managers are watching next
Tyro's December 2025 acquisition of AI-powered financial management platform Thriday, expected to complete in January 2026, is aimed at deepening customer engagement by embedding payments within a broader small business financial services ecosystem. With takeover speculation resurfacing periodically and DMX Asset Management continuing to see meaningful upside whether Tyro remains independent or is acquired by a strategic buyer able to convert more of its revenue base to the bottom line, managers are watching both the RBA reform implementation in October 2026 and any renewed approach from a potential acquirer.
Questions
How do the RBA's payment reforms affect Tyro Payments?
Tamim Funds Management notes the RBA's reforms ending card surcharging from October 2026 and capping interchange fees are expected to benefit Tyro Payments, since it is not an issuer and therefore does not face margin erosion from lower interchange caps.
Is Tyro Payments a takeover target?
Tyro Payments has confirmed receiving multiple approaches from potential acquirers since August 2025, though pricing has not yet been acceptable to the board, according to DMX Asset Management and Forager Funds.
Why do some fund managers rate Tyro Payments a sell despite a cheap valuation?
Wilson Asset Management rates Tyro Payments a sell despite its low valuation, citing ongoing competitive risk in the payments sector and arguing the board missed earlier opportunities to sell the business.
7 managers, 26 comments, with each manager's latest recorded position.
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