Tyro Hits A Milestone Where Tech Meets SME FinServ

According to new Australian bank Tyro Payments Founder Jost Stollmann, his creation is the first technology company in the nation to get a banking license. According to reports in The Australian Financial Review on Sunday (Nov. 29), Stollmann launched the company with his eyes fixed on a target: small and medium-sized enterprises.

Stollmann recently told the publication that Tyro Payments was developed amid a need for SMEs to access financing and finding that they couldn’t get the services they need from banks. According to the entrepreneur, Tyro will use technology and banking as a one-two punch to offer “frictionless,” more affordable SME loans.

“Our big advantage is that we don’t have all the legacy products and systems, and we are entirely cloud-based,” he told the publication. “We are starting green.”

[bctt tweet=””Our big advantage is that we … are entirely cloud-based.””]

Reports noted that Australia’s major financial institutions may be wary of accepting the new competition into the market. But Macquarie Bank research has recently shown that Stollmann’s remarks on the state of SME lending in Australia are correct. Most banks are “overly conservative,” reports said, when assessing small business borrowers’ risk.

Tyro Payments recently secured $100 million worth of capital along with that banking license, and Stollmann said that the company will begin taking deposits sometime next year. When, exactly, Tyro will start lending, however, is uncertain.

“We will take it one step at a time incorporating the learnings from each step,” the founder told reporters.

He added that Tyro will also base how much it will lend SMEs on an array of factors, including how many customers the firm can attract.

At present, Tyro has 14,000 small business customers and processes $8 billion worth of transactions every year for these SMEs. One of the largest challenges so far, Stollmann said, has been convincing SMEs to switch up their traditional banking habits and unbundle their banking services. But with a banking license in place, Tyro will be looking to pose as a stronger competitor to these banks and win SMEs over, according to reports.