Thursday, August 6th, 2020
In mid-June, Splitit Payments Limited publicized that it had entered a deal (that will last years) with Mastercard Inc. The former entered the partnership to speed up the adoption of its installment-payment offering for web-only merchants.
The new deal may see Mastercard onboarding merchants that offer their customers Splitit as an alternative for financing. It may also see Splitit & Mastercard join hands to pioneer groundbreaking installment-credit products.
The NY-based Splitit has also entered such agreements with big players in the payment sector, such as Stripe, Visa Inc., and BlueSnap Inc.
“Mastercard is in support of our dedication to speed up the adoption of installment payments worldwide. This is an excellent opportunity to spread the adoption of our products, take advantage of Mastercard’s international footprint, and diversify our installment offerings. It is a significant milestone in our strategy to expand through tactical partnerships in a bid to make Splitit a famous brand,” said Splitit CEO, Brad Peterson.
Splitit is one of the most active startups in the finance and transactions sector. Apart from installment payments, the firm offers a B2B financing service that is structured differently from other market providers in the transactional credit space like Affirm, Klarna, PayPal, and Greensky.
Instead of offering a credit line alone or via an allied bank, Splitit utilizes the credit line in a shopper’s credit card to tailor an installment deal. The offering also works for debit cards.
Splitit charges merchants a fee, however, customers enjoy the services for free, but for the interest or charges requested by their issuers.
The new deal will allow Splitit to use Mastercard’s Payment Gateway Services and APIs to distribute its installment offerings via multiple channels. Part of their plan is to conduct trials in three markets (still unknown), with intentions to launch worldwide.
“This agreement with Splitit will enable more transaction volumes for companies and offer budgeting solutions when consumers need them,” Zahir Khoja, Mastercard’s VP for global merchant solutions & partnerships.
The Bottom line
It seems like Splitit is unique in everything it does. Instead of a complete merger, the firm has entered separate distribution agreements with capable payments partners in a bid to build its name. Hopefully, this deal will achieve its goal and motivate the two companies to achieve more.