Afterpay rival Splitit Payments Ltd [ASX:SPT] have seen a surge in their share price today, after announcing a partnership with EFT Payments Limited (EFTPay) to provide an instalment payment service to Hong Kong merchants.
At time of writing, Splitit’s share price have managed to climb 13.01% in today’s day of trading, currently sitting at a price of 82 cents.
Splitit provides an alternative payment service where ‘shoppers can split their purchases into up to 36 interest-free monthly payments using their existing Visa or Mastercard’. There is also an option to try an item for up to 90 days before beginning an instalment payment plan.
Splitit expands into Asia
The partnership means Splitit services can now be offered to EFTPay merchants. As EFTPay is one of the key partners of Hong Kong’s Alipay, that means Splitit solutions can now be offered to top merchants like Marriott, UGG, Kate Spade, Sunglass Hut and Estee Lauder.
Executive Lead for Asia-Pacific (APAC) Andrew Pipolo says ‘this partnership allows us to continue our growth and expand our presence in APAC.’
Splitit co-founder and CEO Gil Don drills in the importance of the partnership, highlighting:
‘With online sales at an all-time high, it’s imperative that merchants optimize their e-Commerce businesses to meet the rising demand from consumers, who we have found to be increasingly receptive to instalment payments over other traditional incentives such as discounts and free shipping.’
The contract has an initial term of three years, and requires EFTPay meeting minimum annual targets for Splitit-enhanced merchant transactions. As such, though these targets are commercially sensitive, the partnership is bound to have a material impact on Splitit.
What analysts think of Splitit share price
Analysts still remain sceptical over the viability of the company, even with this new partnership.
Oscar Oberg from Wilson Asset Management told the Australian Financial Review that they’ve put Splitit on a hold recommendation:
‘It’s very speculative. It’s very early stage. The business doesn’t take credit risks, so it has the ability to scale globally quite quickly, but…it’s horrendously expensive.’
Alternatively, David Allingham from Eley Griffiths has the company at a sell at $250 million market cap:
‘The guys are giving it a good go…It’s innovative, it’s new, it’s different, it’s global but they booked $500,000 of revenue, merchant revenue, in the most recent quarter.’
As you can see, what many agree on is the forward-thinking nature of this latest move for the company, which has likely triggered today’s positive response in the market.
Definitely worth keeping an eye on.
For Money Morning
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