Splitit partners with Visa, posts financial results for first full year on ASX

Global consumer finance provider Splitit Payments (ASX: SPT) has announced it will partner with financial services giant Visa to help accelerate the distribution of instalment payments for merchants.

Splitit said it will leverage the Visa Developer Platform to participate in “ongoing innovation of the instalment payments landscape”.

The company will also integrate with Visa Instalment Solutions, which is a new capability being offered to its merchant network to allow Visa cardholders more control over how a purchase is paid.

Splitit chief executive officer Brad Paterson said the Visa partnership will mesh well with the company’s current objectives.

“We share a similar vision to make it easier for consumers and merchants to pay and be paid in instalments,” he said.

“Partnerships like this one are a major plank in our strategy to accelerate growth, and we look forward to working closely with Visa to help our merchant partners provide an enhanced customer experience.”

Stripe collaboration

The deal with Visa follows Splitit’s announcement in January that it would collaborate with global online payment company Stripe to help streamline the new merchant process and enhance the merchant experience.

The Stripe Connect solution will provide technology to enable merchants to self-onboard to Splitit’s platform and replace the current manual process.

“What once took weeks and the help of many team members will eventually be fully automated to take just hours, and eventually minutes,” Mr Paterson said at the time.

“This foundation will allow us to scale our business faster than ever before.”

First year results

Splitit’s first 12 months as an ASX-listed entity has ended well, with the company posting a record revenue for the 2019 financial year of US$1.65 million (A$2.52 million) – up 108% on the previous corresponding period and driven by a growth in merchant fees generated from each authorised transaction on the payment platform.

The company also reported a 97% increase in the number of active merchants to 720, compared to 380 for the previous period, while the total number of 12-month active merchants also jumped 76% to 386 (previously 219).

Repeat usage by active shoppers was 14.3% – up 81% on 2018, as shoppers became more familiar with using Splitit over the course of the year.

The total number of 12 month active shoppers reached 118,783 and represented a net increase of 55% compared to 76,623 in 2018.

During the year, Splitit upgraded its technology platform architecture to a container cloud solution, enabling faster release of new product features and improving the platform’s scalability and overall performance.

The company also put in place new credit facilities for key geographical markets to enable it to respond to the growing demand for its funded merchant model.

A focus on growing its line-up of strategic partnerships saw new agreements signed during 2019 with EFTPay, GHL, Ally Commerce, Shopify, Magento, iPay88 and BlueSnap.

More recently, Splitit entered into a three-month pilot trial to provide instalment solutions to online ticketing specialist viagogo, thereby expanding its reach in the entertainment market.

Strong foundational year

Mr Paterson said the company had experienced a “strong foundational year” on the ASX.

“Following our listing in January 2019, we have built out our global platform and delivered strong growth across our key financial and operational metrics,” he said.

“We have made significant investments in our infrastructure, technology, partnerships and global talent pool [and] we have executed well on our strategy through direct merchant agreements and strategic partnerships.”

The second half of the financial year saw the company increase the strength of its performance.

“Revenue grew at a faster rate than merchant volumes as we saw stronger demand for our more lucrative funded model,” Mr Paterson said.

“The growth rate in active shoppers reflects our deliberate shift towards merchants with higher average order values [and as a result] we exited arrangements with several merchants who had processed high transaction volumes, but at low average order values.”

Splitit is believed to be the only instalment payment solution giving consumers the power to use existing credit on their own terms.

Mr Paterson said it is an “under-served and large global market opportunity” which the company is “ideally positioned to serve” with its differentiated offering.