- Young Afterpay rival Splitit (SPT) has teamed up with global tech giant Stripe for its payment platform
- Through the new partnership, Splitit’s payment platform will be integrated with the Stripe Connect
- This will speed up Splitit’s processes and allow it to expand globally far quicker than it could by itself
- The company kept silent on the financial impact of the partnership but said it would pay Stripe a commission on every transaction processed through the new platform
- Investors are cautiously buying Splitit shares today, with the company currently trading grey
Buy now, pay later competitor Splitit Payments (SPT) has teamed up with California-based payment platform specialist Stripe.
Through the new partnership, Splitit’s payment platform will be integrated with the Stripe Connect platform. Stripe Connect, which Stripe calls a “payments platform for platforms”, will streamline the merchant onboarding process.
Essentially, this means Stripe Connect will help merchants use the Splitit payment platform with less hassle. Currently, Splitit has to manually onboard new merchants to the Splitit platform in their stores. With Stripe Connect integration, this process can be done by the merchants themselves.
For Splitit, this means the company can scale more quickly with increasing merchant numbers. Further, this automatic acceptance for all funded transactions means the Stripe integration will improve Splitit’s funding model.
The integration will also support multiple currencies and improve the merchant reporting process.
Fiscally, Splitit did not tell investors the estimated value or cost of the partnership, but said the terms of the contract are “confidential and commercially sensitive”. Splitit said, however, it will be paying a small percentage of every transaction processed through Stripe Connect to Stripe.
The contract is indefinite — with the companies signing up to stay partnered simply until either party chooses to terminate the agreement.
Despite the somewhat-ambiguous contract terms, teaming up with a company of Stripe’s calibre is likely to bode well for Splitit. Stripe currently has a valuation of US$35 billion (A$52 billion), according to Forbes.
Splitit CEO Brad Paterson said the company is delighted with the new partnership.
“With Stripe, we are able to not only immensely grow our capabilities to accelerate growth but continue to reinforce our commitment to providing the best possible merchant experience for instalment payments,” Brad said.
In fact, Brad touted that with the new partnership, processes that once took weeks will soon take just hours and eventually even minutes.
Stripe’s Head of North America Revenue and Growth, Jeanne DeWitt Grosser, shared similar sentiments, saying the company is happy to help with Splitit’s global expansion.
“Stripe’s global infrastructure will make it even easier for businesses around the world, from Manchester to Melbourne, to get started with Splitit, enjoying higher conversion rates and bigger basket sizes,” Jeanne said.
The Stripe and Splitit integration will be rolled out starting in the second quarter of the year, with plans to have the service fully available in the second half of 2020.
Investors have been tentatively buying Splitit shares today, with shares dancing between red and green. The Stripe partnership is a strong vote of confidence from a global tech giant for Splitit’s platform, but the ambiguity regarding the financial impact of the partnership has left the market cautious.
Still, Splitit has managed to outperform the technology sector on the ASX today. In a day where global markets are taking some heavy blows, Splitit shares are currently trading grey at 66 cents each.