Splitit Raises Millions Amid Buy Now Pay Later Fever

If there are any lingering doubts about the power (and popularity) of the Buy Now Pay Later (BNPL) movement, installment payments platform Splitit has 71.5 million reasons to cast those doubts aside.

The New York-based company, which made its Finovate debut as PayItSimple in 2014, announced that it has raised $71.5 million in a private placement and share purchase plan (SPP). With institutional investors such as Woodson Capital Management, the company plans to use the capital to “accelerate sales and marketing, plus (make) further investments in product and technology” according to a statement. Splitit boasts more than 1,000 ecommerce merchants using its technology, and 300,000+ shoppers with an average order value of $893.

Splitit’s fundraising comes as the company reports record Q2 growth, including processing more than $65 million in merchant sales volume, and growth of 1.76x quarter over quarter and 2.6x year over year. In discussing the company’s success, CEO Brad Paterson credited a new willingness on the part of consumers to “maximize their existing credit to preserve cash flow” while at the same time not incurring additional new debt.

Paterson also noted that while the COVID-19 crisis has helped move digital transformation in ecommerce toward the top of the agenda, it was important for those involved in payments to make it easier for merchants to accommodate their customer’s cash management requirements.

As such, it’s hard not wonder if, once again, crisis is responsible for accelerating innovation. After all, one of the initial innovations in retail, the layaway program, emerged during the Great Depression as a way to maintain at least a minimal level of consumption of non-essential goods during a severe economic retraction. By enabling customers to pay for items in small increments over time and then receive those items once they had been fully paid for, the growing retail economy was able to survive an extended period of historically low demand.

The buy now pay later phenomenon is layaway in reverse, allowing customers to gain the benefits of the purchase immediately and moderating the impact of the cost by paying for that purchase over time. But the goal – to accelerate consumer activity and expand the ability of people to spend – remains the same. The only difference is that layaway tended to disappear once credit cards became ubiquitous, while buy now pay later appears to be rising at a time when we are realizing that affordable consumer financing might not be as ubiquitous as we thought.

For Finovate fans, Klarna has been the pioneer in the Buy Now Pay Later space, with fellow alums like Sezzle also earning recognition for its interest-free buy now pay later option. Founded in 2005 and 2016, respectively, both companies are reminders of how fintechs have been providing consumers with alternative financing options well before the coronavirus hit.

That said, it is clear that COVID-19 has stimulated interest in Buy Now Pay Later options. The Business of Finance reported earlier this week that BNPL had become “fashion’s go-to during the pandemic.” Also this week, American Express announced that it would extend its buy now pay later service to more of its cards. The Wall Street Journal featured Australian Buy Now Pay Later specialist Afterpay at the beginning of this month in the wake of the firm’s announcement that it had signed up more than 1.6 million U.S. users since the onset of the coronavirus in March. And Shopify announced this month that merchants on its platform would have access to BNPL financing from installment payment company Affirm. Affirm looks like it is ready to maximize the Buy Now Pay Later moment with an initial public offering, according to reporting in the Wall Street Journal.

Even the big banks are getting into the Buy Now Pay Later game. Goldman Sachs has introduced a new, installment payment feature called MarcusPay – in partnership with JetBlue Airways – as part of a bigger “build-out” of its Marcus by Goldman Sachs digital banking platform. This week, Citi partnered with Amazon to launch its own BNPL offering Citi Flex Plan.


Photo by Artem Beliaikin from Pexels

Splitit Taps Stripe to Facilitate Merchant Onboarding for Payment Installments

Buy now, pay later company Splitit landed a partnership today with payment platform Stripe. The agreement makes Stripe the payment facilitator for all new merchants who onboard with Splitit. This move is expected to speed up the onboarding process for Splitit’s new merchant clients.

“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 installment payments,” Splitit CEO Brad Peterson said. “What once took weeks and the help of many team members will eventually be fully automated to take just hours and eventually minutes.”

Splitit launched under the name PayitSimple in 2013. The company allows end customers to break down large payments into interest-free installments on their existing credit card without requiring a credit check or pre-qualification.

Last fall, the New York-based company partnered with Shopify, making its buy now, pay later technology available to Shopify’s 800,000+ merchants. This came a few months after the company made its payment solution available to more than 2,000 merchants in Malaysia, Thailand, Indonesia, and the Philippines via a partnership with GHL ePayments.

The company listed on the Australian Stock Exchange in early 2019, raising $12 million in an IPO. The company has a current market capitalization of $206 million.

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Around the web

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  • CREALOGIX appoints Oliver Weber as new CEO as of January 2020.
  • Card issuing platform Marqeta and cloud banking services provider Mambu announce new collaboration.
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  • Splitit forges new strategic partnerships with Malaysian payment solution provider iPay88 and global payments company BlueSnap.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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Around the web

  • HackerOne awards $3,500 in bounties to a pair of researchers who discovered vulnerabilities on its own platform.
  • AlphaPoint adds support for margin trading to its platform.
  • Bank of Georgia goes live with a new smart personal financial management (PFM) solution, mBank, developed by Strands.
  • Installment payment solution Splitit announces a new partnership with chiliPAD sleep system maker, Chilli.
  • Tradeshift integrates with fraud protection specialist SiS-id to reduce payments fraud.
  • Xero launches Pay with TransferWise, a new domestic bill payment solution to help U.K. customers pay and manage bills.
  • Pendo Systems teams with WSN to help customers navigate digital transformation.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Splitit Secures Partnerships with Shopify, Divido

The buy-now-pay-later e-commerce specialist Splitit has picked up a pair of new partnerships in recent days.

The company announced this week that its Buy Now Pay Later (BNPL) solution will be available across Shopify’s network of 800,000+ merchants in 20 different countries. Splitit also has teamed up with point-of-sale financing company Divido to make its BNPL offering available to the company’s 1,000 banks, merchants, and partners. The Divido integration will go live initially in the U.K., and shortly afterwards launch in the U.S.

“The feedback we consistently receive from merchants is that consumers are looking for better ways to manage their cash flows,” Splitit CEO Brad Paterson said. He highlighted the high number of credit card holders and the upwards of 70% of balances that remain untapped, and said that Splitit provided a better way for consumers to manage cash flow.

Paterson added that improving cash flow for consumers was a good deal for merchants, as well. “By making customer purchases on credit cards more affordable, merchants are also converting more sales and growing their average transaction values, delivering significant benefit to everyone involved,” he explained.

Splitit’s partnership news comes as the company, which debuted at FinovateFall 2014 as PayItSimple, announced a string of agreements with a diverse set of U.S. brands ranging from sleep technology specialists to luxury retailers to accountancy services. Paterson referred to the new agreements as part of the company’s growth strategy in North America, a strategy that also includes plans for new leadership in the region. Current CEO Paterson was previously in charge of North American operations and will relinquish those responsibilities once a replacement is in place.

Over the summer, Splitit announced a partnership with GHL ePayments that will make its installment payment offering available to 2,000+ online merchants in Southeast Asia. Also this year, the company teamed up with EFTPay to bring its buy now pay later solution to merchants in Hong Kong and Macau. Australia-based retailer Kogan announced in July that it would offer Splitit’s payment option, making it the first retailer in the country to do so.

Founded in 2013, Splitit is headquartered in New York. The company has offices in London, and an R&D center in Israel. Splitit has raised more than $43 million in funding, most recently including a post-IPO equity fundraising of $20.5 million (A$30 million) closed in May.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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  • SuperMoney tops $2 billion in loan requests via its online lending marketplace platform.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Splitit Brings Installment Payment Options to ASEAN Merchants

A new partnership between Splitit and payment service GHL ePayments will make Splitit’s installment payment solution available to more than 2,000 online merchants in Malaysia, Thailand, Indonesia, and the Philippines. The deal will allow GHL to offer Splitit’s installment payment option to its customers, and enable Splitit to grow its presence in the Asia-Pacific region, according to company CEO and co-founder Gil Don.

“We are delighted to offer GHL merchants a simple way to boost sales and improve customer satisfaction by offering interest-free installments at the checkout,” Don said. “Splitit’s payment solution is a highly effective way for merchants to ease eager travelers’ budget woes, while increasing brand loyalty for merchants.”

Splitit enables consumers to divide the cost of online purchases into no interest, no fee monthly installments. Consumers can use their existing debit or credit card to make purchases from participating online merchants, choose the Splitit option, and receive instant approvals. The company notes that merchants have seen an 11% decrease in cart abandonment, a 12% increase in sales, and an 80% increase in average order value (AOV) after deploying the technology.

Danny Leong, Group CEO of GHL Systems Berhad, praised Splitit as a unique addition to the suite of solutions GHL provides to its merchant partners. “Splitit’s non-lending offering is unlike any other payment player’s and we believe this partnership will help us continue our growth as ASEAN’s trusted payment experts,” Leong said. One of the major merchant acquirers in the ASEAN region, GHL processes more than $241 million ($350 million AUD) in total online and offline transaction value each month across its merchant network. The firm manages more than 368,000 point of sales in Malaysia, the Philippines, Thailand, Indonesia, Singapore, Cambodia, and Australia.

Making its Finovate debut as PayItSimple in 2014 at FinovateFall, the company rebranded as Splitit a year later as part of an emphasis on serving “all members of the credit card payment ecosystem.” More recently, the company partnered with EFTPay to bring its installment payment option to merchants in Hong Kong and Macau, and teamed up with Australian retailer Kogan. Splitit also bolstered its executive ranks this summer, adding former Intuit and PayPal executive Brad Paterson to lead its North American operations.

Based in New York City, Splitit announced a post IPO equity round in May, raising $20.7 million ($30 million AUD). The funding followed the company’s successful IPO on the Australian Stock Exchange at the beginning of the year. Trading under the ticker SPT, Splitit has a market capitalization of $200 million.

ACI Invests in Indian Payments; Brazilian Fintech Picks Up $200M from Japan

As Finovate goes increasingly global, so does our coverage of financial technology. Finovate Global: Fintech News from Around the World is our weekly look at fintech innovation in developing economies in Asia, Africa, the Middle East, Latin America, and Central and Eastern Europe.

Central and Southern Asia

  • ACI Worldwide invests in Mumbai, India-based payments innovator, Mindgate Solutions.
  • Pakistan’s Bank of Khyber to deploy new core banking system from Temenos.
  • Infosys earns recognition as a ‘leader’ in the IDC MarketSpace: Worldwide IT Service Management (ITSM) Implementation Services 2019 Vendor Assessment.

Latin America and the Caribbean

  • Brazilian fintech Creditas picks up $200 million investment from Japan’s Softbank, boosting the company’s valuation to $700 million.
  • Crowdfund Insider reveals the 3 Biggest Fintech Trends Shaping Latin America.
  • Amero-Isatek to open its first brick and mortar cryptocurrency exchange in Mexico’s Nuevo Leon, Monterrey.

Asia-Pacific

  • Splitit partners with EFTPay to bring installment payments to merchants in Hong Kong and Macau.
  • Vietnam’s MSB (Maritime Bank) picks SunTec for its customer centricity system.
  • Morocco-based BMCE Bank of Africa to leverage technology from Temenos to drive new corporate banking and trade finance operation in China.

Sub-Saharan Africa

  • Global Finance investigates the rise of Africa’s entrepreneurial class in the private banking industry.
  • Finextra looks at three reasons why fintech is driving change in Africa.
  • Standard Bank introduces new Mastercard-powered ditital trade solution, SimplyBlu, for SMEs in South Africa.

Central and Eastern Europe

  • Wallet, the PFM app from Prague-based fintech BudgetBakers, earns license from Czech National Bank to join the bank’s APIs.
  • New lending platform for “multi-credit” services, Omnicredit, goes live in Romania.
  • Global Finance interviews Alexey Krgulov, Acting Director of Digital Business Platform with Sberbank.

Middle East and Northern Africa

  • Turkey’s Isbank partners with Russian PSP Yandex.Checkout to support e-commerce between the two companies.
  • Disrupt Africa features MerQ, an Egyptian startup that leverages AI to promote financial literacy.
  • AMEinfo publishes its report on banking and fintech in the Middle East and Africa.

Top image designed by Freepik

Finovate Alumni News

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  • Splitit (formerly PayItSimple) announces partnership with Hong Kong-based EFTPay.
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  • Four Finovate alums – Digital Onboarding, Gremlin Social, Voleo, and Neener Analyticsearn spots in the fourth Venture Center FinTech Accelerator program sponsored by Fidelity Information Services.
  • Inside Secure ships Whitebox Designer, a new software security tool.
  • Featurespace to power transaction monitoring for Permanent TSB.
  • Jumio wins the 2019 Fortress Cyber Security Award for Authentication and Identity from the Business Intelligence Group.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.