I’m not convinced the recent shift in market sentiment isn’t an overreaction to the government’s rhetoric around restricting surcharging. Sure, surcharging has been a significant part of Smart Pay’s value proposition, but it’s far from their only revenue stream.

It seems shortsighted to assume that a well-managed, disciplined company like Smart Pay can’t adapt its business model to shift the cost from customers to merchants. In fact, they already offer such a model.

The key questions, to my mind, are how much churn we might see from their existing Australian customer base, and how much impact the surcharging restrictions will have on future customer acquisition. As for churn, my guess is minimal. Even if merchants are required to move the surcharge above the line, it doesn’t necessarily follow that they’d go through the hassle of switching terminal providers—especially when their current system is likely integrated into their business software.

When it comes to future growth, while losing this point of difference in the Australian market might create some headwinds, it’s worth noting that not all of their customers utilize the surcharge option anyway. There’s still plenty of runway for a management team that has consistently demonstrated strong operational discipline. This company is far more than just a payment provider with a surcharging capability.

I hold IRL & Stawman, and I’m seriously considering increasing my stake. But please, have it at Stawpeople, why am I wrong?