- Tyler Technologies expects a 2026 wave of state and local government payments modernization, accelerated by a federal push to phase out paper checks and rising demand for embedded and real-time options.
- The company is prioritizing fraud analytics plus unified payment orchestration and least-cost routing to improve security and reduce processing costs.
- Recent wins in Oklahoma (statewide cashiering across 44 sites) and Florida corrections (digital deposit/disbursement across 128 facilities, including prepaid release cards) highlight expanding public-sector adoption.
- Financial momentum supports the push, with recurring revenue up ~12% YoY, SaaS about 85% of revenue, and payment-related new contract value up 78%.
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Tyler Technologies is positioning itself at the forefront of public sector payments modernization, leveraging both regulatory momentum and internal capabilities. The federal directive issued in March 2025, which mandates ending paper check issuance, has catalyzed procurement activity among smaller governmental entities. Tyler’s strategy responds to this shift by offering turnkey cloud-based payment channels—encompassing cards, digital wallets, and buy now, pay later (BNPL)—which many jurisdictions previously lacking infrastructure are now compelled to adopt.
Concurrently, Tyler is aggressively investing in fraud prevention and analytics. Clients are increasingly concerned about risks associated with payment channels; Tyler’s “Data & Insights” platform is being used to expose fraud (e.g., driver’s license fraud) and to improve transaction integrity. This aligns with broader trends emphasizing security in government finance. The company also highlights payment orchestration and least-cost routing as levers to reduce government cost burdens associated with merchant fees and card processing.
Growth in digital disbursements represents another strategic vector. Tyler reports ~440 million transactions and $50+ billion processed annually across its public sector clients; however, disbursements (payments going out) are still relatively under-leveraged. Programs such as inmate release prepaid debit cards (Florida Department of Corrections) showcase the potential for increased volume in this category.
Tactically, Tyler’s expanding cloud adoption and large installed base are major competitive advantages. Its Oklahoma contract creates a unified point-of-sale system over 44 locations, centralized revenue reporting, and uses cloud infrastructure to provide modern scalability. Tyler is also winning large renewals — Texas, Colorado, Mississippi, Vermont — reinforcing its presence and recurring revenue streams.
Financial metrics underpin these strategic moves. SaaS revenues have grown significantly (20.3% YoY), accounting for ~85% of total revenues, with recurring revenue tailwinds. New payment-related software deals increased ~78% YoY, underscoring market demand. Tyler thus finds itself well-capitalized, yet must manage execution risk, particularly in cloud migrations, margin pressure, and state/local budget cycles.
Supporting Notes
- Morgan Jines, VP of Payments, said that smaller towns reliant on checks or ACH are being pushed under new federal policy to “turn on other payment channels, whether that be digital wallets, whether that be buy now, pay later”.
- Requests for proposals (RFPs) around payment modernization have increased “more [than] I’ve ever seen” in the past 12-18 months, per Tyler leadership.
- Tyler’s data and insights platform helped uncover driver’s license fraud at one government entity; fraud mitigation is becoming a core part of its product value proposition.
- In Q3, Tyler signed 268 new payment deals representing approximately $8.6 million in projected ARR, including enterprise payments expansion in Riverside County, CA.
- The Florida Department of Corrections went live with Tyler’s deposit and disbursement solutions across 128 facilities, including inmate commissary accounts, prepaid cards on release, and multiple disbursement channels like PayPal and Venmo.
- Service Oklahoma agreement: statewide cashiering solution covering 44 locations, centralized revenue management, POS modernization, AWS-hosted cloud solution, real-time analytics for trend detection and anomaly detection.
- Financial performance: recurring revenues grew ~12.1% YoY; SaaS revenues grew ~20.3%; new SaaS contract value ~$105.6 million, up 78% over the prior year period.