The Splitit Ltd (ASX: SPT) share price is on the rise today after the buy now, pay later (BNPL) provider announced a partnership with Mastercard. The multi-year agreement is intended to accelerate the global adoption of Splitit's instalment solution.
At the time of writing, the Splitit share price is up by a whopping 33.33% to 88 cents per share.
What does Splitit do?
Splitit provides a payment method solution that allows customers to pay for purchases with an existing debit or credit card by splitting the cost into monthly payments. Unlike competitor Afterpay Ltd (ASX: APT), Splitit does not itself extend credit to customers. Its solution enables merchants to offer customers an easy way to pay for purchases in monthly instalments with instant approval.
What does the Mastercard agreement mean for Splitit?
The agreement with Mastercard allows Splitit to integrate its instalment solution with Mastercard's suite of technology as a network partner. This will enable merchants to deliver seamless and secure customer checkout experiences, both in person and online.
Commenting on the new agreement, Splitit CEO Brad Paterson stated:
This is a fantastic way to broaden 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 and make Splitit a household name.
Splitit and Mastercard will jointly develop instalment and related products. There are plans to launch pilots across 3 markets ahead of a global rollout.
"The partnership with Splitit will help drive higher transaction volumes for businesses and deliver budgeting solutions in the moment customers are seeking them," said Mastercard's Executive Vice President of Global Merchant Solutions and Partnerships.
How has the Splitit share price performed?
The Splitit share price has tripled since its March low. As a result, the company was added to the All Ordinaries Index (ASX: XAO) last week, following the quarterly index rebalance by S&P.
Splitit reported record monthly merchant sales volumes of US$25.8 million in May, up 39% from April and 321% compared to May 2019. Splitit's total unique shoppers surpassed 290,000 in May, up 18% from the end of Q1 FY20.
The company also reported merchant numbers increased by 12% over the same period to 964. Its average order value also climbed, reaching US$939 in May up from US$737 in Q1 FY20. Its accelerated growth in May was driven by new large merchants onboarded in recent months.
Foolish takeaway
BNPL providers have been among the 'winners' of the coronavirus pandemic, as lockdowns have seen e-commerce expansion accelerate. Merchants are also actively pursuing strategies to improve conversion rates and Splitit is seeing growth in its share of checkout.
