Coronavirus lockdown boosts Splitit sales volumes

Buy now, pay later provider Splitit Payments has tripled its sales volumes.

The company aims at capturing market share in higher purchase categories of over $US400.

Buy now, pay later provider Splitit Payments tripled its sales volumes as consumers turned to online shopping during the global coronavirus lockdown.

The ASX-listed but New York-based company posted a merchant sales volume for May of $US25.8m ($37.4m), an increase of 321 per cent compared to May 2019.

Monthly merchant sales jumped 39 per cent compared with the previous month, with strong performance off the back of accelerated online spending.

Splitit is a payment solution that allows a consumer to turn a credit card transaction into instalment payments. Payments then take interest charges from the credit card provider.

Speaking to The Australian, Splitit chief executive Brad Peterson said the sales momentum was spurred by merchants looking to improve conversion rates and consumers trying to ease spending pains during the pandemic.

“Consumers are choosing Splitit as they can use their existing credit card to make transactions without applying for new debt,” Mr Paterson said.

“They are using instalment payments to ease the burden of that cash pain.”

Splitit’s North American monthly sales were up 336 per cent compared to May 2019, while sales at European operations grew by 548 per cent over the same period.

The company’s total number of shoppers surpassed 290,000, an increase of 18 per cent since its first quarter results of the current financial year.

Mr Paterson said the company remained “bullish” about the future growth of the North America BNPL industry.

“We continue to see strong merchant demand as e-commerce expansion accelerates, while merchants are actively pursuing strategies to improve their conversion rates during and beyond the coronavirus pandemic,” Mr Paterson said.

“People buying online is here to stay. We expect to see triple the penetration and triple the use, especially in the US.”

Splitit’s sales increase follows a growing trend of consumers adopting BNPL payment methods globally, with major Australian providers eyeing the North American market.

Zip on Tuesday announced it would acquire US company QuadPay in an attempt to ramp up its US expansion. Market leader Afterpay on May 21 said its active US customer base had grown to five million.

Mr Paterson said in order to sustain growth in the North America BNPL market, providers would need to have a strong augmented product.

“If you are different you will thrive, we are starting to see consolidation in the consumer financing industry,” he said.

For the month of May, Splitit’s average order value was $US939. Total merchants grew to 964, a 12 per cent increase from the end of the first quarter of the 2020 financial year.

The company aims at capturing market share in higher purchase categories of over $US400.