Splitit Payments Ltd. announced Thursday that it had signed a multiyear agreement with Mastercard Inc. intended to accelerate adoption of its installment-payment service for online merchants.
The distribution agreement opens the possibility of Mastercard-accepting merchants offering Splitit as a financing option to their customers. New York City-based Splitit also has struck partnerships with Visa Inc., online merchant processor Stripe Inc., and gateway and e-commerce services provider BlueSnap Inc.
The new agreement further calls for Splitit and Mastercard to jointly develop new installment-credit products.
In a statement, Splitit chief executive Brad Paterson said Mastercard shares “our strong commitment to accelerating the adoption of installment payments globally. 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. It’s a major plank in our strategy to grow through strategic partnerships to make Splitit a household name.”
Splitit, which also has a business-to-business financing service, uses a different model from other providers in the fast-growing transactional credit market that includes PayPal, Affirm, Greensky, and Klarna. Rather than providing a credit line itself or through a partner bank, Splitit uses the credit line of a customer’s credit card to create an installment offer. The service also can be used with debit cards, according to Splitit. Merchants pay fees to Splitit, but the service is free for consumers apart from interest or fees their issuers charge.
“Splitit is available to any cardholder around the world, enabling them to use their existing credit limit to pay over time,” a spokesperson tells Digital Transactions News by email. “Splitit is partnering with these brands to accelerate acceptance and improve the user experience for installment payments.”
Some 862 merchants were using Splitit’s system as of the first quarter, up from 720 at the end of 2019 and more than double the merchant count a year earlier, according to company reports. The spokesperson says merchant sales volume totaled $87.9 million in 2019, up 52% from $57.9 million in 2018. May’s merchant sales volume hit $25 million for an annualized rate of $300 million, she adds. The average order value in the first quarter was $737.
Splitit will get access to Mastercard’s Payment Gateway Services and application programming interfaces in order to offer its installment service through various channels. The two companies expect to launch pilots in three markets, which they didn’t name, with plans to roll them out globally.
“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 a statement. “Our network and global reach, alongside Splitit’s solution, aligns with our commitment of providing choice, control, and simplicity to consumers and businesses.”