Splitit's point of sale credit gains access to Mastercard's network
Splitit has boosted its merchant access in the crowded install payment market through a series of deals with large payment companies, the latest being a five-year agreement with Mastercard.
The partnership will use Mastercard’s Payment Gateway Services and API technology to enable a systemic, scalable way to offer Splitit’s installment solution through any channel. The partnership will also explore accelerated collaborations with Mastercard’s suite of installment solution providers. As part of the Mastercard deal the two companies will also jointly develop installment and related products.
Splitit uses consumers' existing credit, converting it into smaller installment payments, a different approach than rivals such as Klarna, Affirm and PayPal Credit. The company reported that also allows consumers to use debit cards. Splitit contends its model has resulted in 78% higher online cart conversion rate and a 20% increase in average order value. The plan for the partnership is to offer Splitit’s solution to both in-store and online channels. Splitit's Mastercard partnership will pilot in three markets with a global deployment to follow.“This is a fantastic way to broaden the distribution of our solution, leveraging Mastercard’s incredible global reach, and build out a range of installment services," Splitit CEO Brad Paterson said in a press release. "It’s a major plank in our strategy to grow through strategic partnerships to make Splitit a household name.”
The New York-based Splitit’s merchant sales have been experiencing strong growth with revenues up over 100% in 2019 compared with 2018. With the coronavirus pandemic pushing consumers to shop increasingly online, Splitit has seen year-over-year merchant sales jump by 153% in March and 165% in April. In the partnership announcement Splitit reported May 2020 sales were up 321% compared with May 2019.
Splitit has been incrementally building its merchant access through partnerships. It has partnered with Stripe in February, Visa in March, and most recently in June with all-in-one payments platform Blue Snap. Splitit in 2019 branched into B2B payments with the launch of Splitit Business Payments, which allows businesses to improve liquidity by securing orders from manufacturers and suppliers through agreed-upon monthly payments using company-issued credit or debit cards.
“This partnership with Splitit will help to drive higher transaction volumes for businesses and deliver budgeting solutions in the moment consumers are seeking them,” Zahir Khoja, executive vice president of global merchant solutions and partnerships at Mastercard, said in the release. “Our network and global reach, alongside Splitit’s solution, aligns with our commitment of providing choice, control, and simplicity to consumers and businesses.”
Either party can cancel the agreement with six months notice, and the partnership will automatically renew for one-year terms unless either party gives 90 days' notice.