Specialist small business bank Tyro Payments is winning new merchant customers after its pioneering move two weeks ago to introduce least-cost routing on contactless debit card transactions.Bronwyn Yam, Tyro's director of products, told Banking Day that the challenger bank had acquired new business customers in the hospitality, restaurant and petrol retailing sectors since it became the first acquirer to slash merchant fees on 12 March.She revealed that 1200 business customers had already requested to be switched to least-cost routing arrangements in the two weeks since Tyro began offering the service."The average savings for those merchants has been about 35 per cent for the re-routed transactions," Yam said.Under reforms being advanced by the Reserve Bank, average fees borne by retailers on Tap 'n Go debit transactions are expected to plummet this year as barriers are dismantled to Eftpos' entry into contactless transaction processing.While the average fees charged by Eftpos for processing debit card transactions are more than half those levied by Visa and Mastercard, the major Australian banks automatically route contactless payments to the expensive processing platforms owned by the global schemes.Tyro is the first Australian bank to allow merchants to use the low-cost Eftpos platform to process these payments.Banks such as CBA appear to be delaying the introduction of the service.The global card schemes and big merchant acquirers such as CBA and Westpac, stand to lose hundreds of millions in fee revenue when the RBA eventually compels them to adopt least-cost routing.Yam said that Tyro had diverted around 126,000 contactless transactions worth A$6 million to the Eftpos network in the first week of least-cost routing."We've had an extremely positive response from our existing customers and other merchants," she said."We are getting a lot of calls from merchants asking us whether the savings are true."Yam said the attraction of least-cost routing had been a factor for merchants entering new acquiring agreements with Tyro since the start of the month.