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The buy now, pay later platform Splitit says it will offer its installment-payment services in the automotive-repair and services business through a partnership with 1stMILE, a loyalty and payments platform specializing in that industry. The move comes as many automobile-servicing costs are rapidly developing into necessary rather than discretionary transactions.
The two companies expect to launch their joint payment services in a rollout to “thousands” of automobile-service shops, ultimately reaching the more than 17,000 locations served by 1stMILE. Through the partnership, shops will receive payment in full while customers can select from installment-payment choices at the point of sale, the companies say. Both companies support BNPL services through cards.
The automotive-repair industry could prove to be a promising market for installment-payment providers. Repair and servicing costs can run into thousands of dollars, according to industry figures. While a wheel alignment might run less than $200, more involved work, such as a transmission replacement, can cost owners anywhere from $2,500 to $6,000. The link between Splitit and 1stMILE “represents the next evolution of point-of-sale financing for tire and automotive service providers,” says Rob Murphy, vice president of credit services at 1stMILE, in a statement.
For its part, Atlanta-based Splitit offers its service on credit cards already held by consumers, a move that results in an average approval rate of 85%, the company says. It also offers virtual Visa cards. Terms typically require four payments over six weeks.
The growth potential in BNPL came to the fore Thursday with quarterly results reported by Sezzle Inc., a 10-year-old Minneapolis-based provider. Sezzle saw its June-quarter payment volume grow 37.9% year-over-year, to $1.3 billion, while its revenue soared nearly 52% to $149.7 million, a quarterly record, according to the company.
At the same time, active subscribers, or users, on its platform grew 76.4% for the quarter, to 854,000. Sezzle said that jump was the “largest [year-over-year] subscriber gain in company history.” That growth helped the company generate a 58.4% increase in adjusted net income, to $39.3 million, the company reported.
Sezzle is preparing to launch Sezzle Send this month, having started SezzleCash in June. Both launches will move the company beyond a pure-play BNPL platform, its executives say. SezzleSend will allow users to make peer-to-peer transfers using the recipient’s phone number. Transfers can be funded over five installments. Recipients must open a Sezzle account to receive the cash.
Sezzle Cash is a cash-advance service intended for users’ short-term needs, the company says, with repayment available through pay-in-four or pay-in-five installment plans.
