The New York-based ‘buy now, pay later’ (BNPL) provider announced its results for the third quarter of 2020.
Splitit Payments Ltd [ASX:SPT] experienced record growth throughout the year and on the back of the news, the SPT share price pushed up 1.87% to trade at $1.63 at the time of writing.
What’s happening at Splitit Payments?
This year will forever be remembered for the COVID-19 pandemic.
A once in a century event. One of the main differences between this year’s crisis and the Influenza A pandemic of 1918 is technology.
Modern technology has made it extremely easy to pay for goods and services through a wide variety of means, with the most recent being BNPL services.
Being able to buy something today and pay for it later in instalments is proving to be a massive hit worldwide.
For companies in this sector the CODIV-19 pandemic created a dream set of circumstances.
People stuck at home or working from home and wanting to spend.
With many if not all BNPL companies being online services, people have naturally turned to them for an easier way to get their goods on better payment terms.
For Splitit Payments the outcome is enormously profitable:
- Merchant Sales Volume (MSV) grew strongly to US$70.9 million, up 214% year-over-year (YoY)
- Gross Revenue (Non GAAP) of US$2.4 million, up 318% YoY
- 4K Total Merchants, up 117% YoY
- 362K Total Shoppers, up 97% YoY
With a record number of people turning to BNPL providers, this also encouraged a record number of merchants to take up the service as well.
- Active merchants up 90%
- Total shoppers up 94%
(August 2020 compared to August 2019.)
Where to from here for Splitit Payments?
Splitit Payments isn’t alone in its stunning growth.
The COVID-19 pandemic at some stage will hopefully be cured and when it does it will be interesting to see what happens to the usage of these services in the long term.
In the short term, the price for Sliptit Payments moved sideways in recent weeks, which is comparable to the rest of the sector.
Like Zip Co, the price for Splitit Payments pulled back to a small sideways phase recently.
Should the price move up then the levels of $1.71 and $1.92 may provide future resistance.
On the downside if the price retraces, then the level of $1.36 may come into focus, which has proved to be strong over the last few months.
For Money Morning
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