Splitit Payments (ASX: SPT) has signed a multi-year agreement with Mastercard in a bid to accelerate the adoption of its payment instalment solution globally.
The agreement will see Splitit and Mastercard collaborate to integrate Splitit’s instalment payment service with Mastercard’s technology as a network partner, enabling merchants to create more engaging consumer experiences at checkout, both in-store and online.
Splitit’s payment solutions enable customers to pay for purchases with an existing bank card by splitting the cost into interest and monthly payments, without additional registrations or applications.
The company also enables merchants to offer their customers a simple way to utilise monthly instalments using instant approval, decreasing cart abandonment rates and increasing revenue.
Splitit claims that it serves “many” of Internet Retailer’s top 500 merchants, with its global operations extending to hundreds of merchants around the world. Headquartered in New York, Splitit currently operates a research and development centre in Israel as well as offices in London and Australia.
Splitit said it struck the agreement as a means of furthering the reach of its own technology and co-developing products that would bring “choice, control, and simplicity to consumers and businesses”, the company said.
“This is a fantastic way to broaden the distribution of our solution, leveraging Mastercard’s incredible global reach, and build out a range of instalment services. It’s a major plank in our strategy to grow through strategic partnerships to make Splitit a household name,” said Brad Paterson, chief executive officer of Splitit.
Additionally, the deal terms stipulate that Mastercard and Splitit will also jointly develop “instalment and related products” with the US giant’s payment gateway services and API technology set to “enable a systemic, scalable way to offer Splitit’s instalment solution”.
The partnership will also explore “accelerated collaborations” with Mastercard’s suite of instalment solution providers, Splitit said.
As a result of onboarding several new large merchants so far in 2020, growing customer revenues and the broader shift towards eCommerce, Splitit reported merchant sales volume of US$25.8 million (A$37.6 million) in May this year – up 321% compared to May 2019 and 39% higher compared to April 2020.
Accelerating growth and strong market conditions have meant Splitit delivered the best monthly performance figures in its history with particularly strong performance being recorded in the US.
In a regulatory filing, Splitit said its business activity in North America was up 336% and 548% higher in Europe in May 2020 compared to May 2019 – a performance trend the company has attributed to its strong partnerships with global eCommerce retailers such as Purple, Nectar Sleep and Canyon Bicycles.
The Mastercard partnership enables Splitit to launch pilots in three separate markets in the foreseeable future. The company has not published specific details although eCommerce has been referred to as the source of strong merchant demand.
“We continue to see strong merchant demand as eCommerce expansion accelerates, while merchants are actively pursuing strategies to improve their conversion rates during and beyond the Coronavirus pandemic,” said Mr Paterson.
“This partnership with Splitit will help to drive higher transaction volumes for businesses and deliver budgeting solutions in the moment consumers are seeking them,” said Mastercard’s executive vice president of global merchant solutions and partnerships Zahir Khoja.
“Our network and global reach, alongside Splitit’s solution, aligns with our commitment of providing choice, control, and simplicity to consumers and businesses. Consumers walk away with payment options and businesses get paid in full, building consumer loyalty,” he added.
Splitit’s shares were 50% higher, up to $0.99 per share in midday trade.