Payments company Tyro will use funds raised from its initial public offer to develop the e-commerce side of its business, including a planned hub for the integration of apps and payment terminals. Tyro has lodged a prospectus and will launch its initial public offer next week. It is aiming to raise around A$300 million. Its market capitalisation at listing will be around $1.3 billion.If all goes to plan it will commence trading on the Australian Securities Exchange on December 11.Funds raised from the offer will be used to expand its offerings, increase the merchant base, enter new industry verticals, undertake product innovation and look for partnership and merger opportunities.The new verticals it is targeting are accommodation and services.It is investing in a service called me&u, which it describes as a "mobile order and pay in venue solution for the hospitality industry, which seeks to improve restaurant goers' experience".me&u would sit on Tyro Connect, a proposed integration hub for apps and point of sale systems.The company says a couple of the merchant "pain points" it is trying to solve with these developments are "counter clutter" and manual processing.The company was started in 2003, when it was called MoneySwitch, operating in the merchant acquirer segment of the retail payments market, where it provides a range of services including payment terminals, an online payment gateway, clearing and settlement of funds, and processing chargebacks.Tyro was granted a specialist credit card institution licence in 2005 and in 2015 it received a banking licence.It earns revenue from merchant service fees, payment terminal rental and sales, and other fee income. It also earns interest on loans in the form of merchant cash advances. Lending come is only a small fraction of payment revenue.The company uses its own technology, with most of its merchant acquiring systems built and maintained in-house.It claims to be the fifth largest player in that market, working with more than 29,000 merchants. Most are small and medium-sized enterprises in retail, hospitality and health.It has 51,000 payment terminals deployed, compared with 255,000 for Commonwealth Bank, 154,000 for NAB, 151,000 for ANZ and 139,000 for Westpac. However, it claims its terminal network is growing much faster than those of its rivals.Tyro processed $17.5 billion in transaction value in 2018/19 - a 31 per cent increase over the previous year. Merchant number grew 25 per cent.It estimates that the total value of card payments acquired in Australia in the year to June was $651 billion, giving it a 2.7 per cent share. It claims a 10.2 per cent share of its market verticals - retail SMEs, hospitality and health.Its focus has been on processing "card present" payments but it has recently launched an ecommerce product to handle card not present transactions.Revenue grew 28 per cent to $189.8 million in 2018/19 but the company made an EBITDA loss of $6.1 million and a statutory loss of $18.7 million.According to the prospectus, these losses reflect the company's continuing investment in attracting more merchants, investment in the team and product