The Splitit Payment Ltd (ASX: SPT) share price has continued its incredible run with another strong gain on Wednesday.
In morning trade the newly listed Afterpay Touch Group Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) rival has seen its shares rise a further 13% to 87 cents.
This latest gain means the payments company's shares have now gained a remarkable 335% since listing on the ASX at 20 cents per share on January 29.
What is Splitit?
Splitit is an Israel-headquartered payments company that provides a cross-border credit card-based instalment solution to businesses and merchants.
For consumers this means that they can pay for a product using their existing credit cards but divide the total cost across as many interest-free monthly payments as they feel is necessary, up to a limit of 36 months.
Once the customer has selected the time-period they want, Splitit charges their credit card every month until their plan is finished.
This can even be done using multiple cards, which the company believes will allow shoppers to get what they want without having to apply for another credit card or go into debt.
Debit cards can also be used, but shoppers are limited to $400 of credit and must repay the balance through a maximum of three interest-free monthly payments.
Another service the platform offers merchants is the option for shoppers to try out items for up to 90 days before any payment is charged to their credit card.
The item cost is put on hold on the credit card to protect the merchant, ensuring that payment is made in the event the item is not returned and the shopper does not actively finalise the purchase.
If the shopper decides to return the item, the hold is released, and the shopper is not charged any interest or fees.
What's next?
Management has stated that high cart abandonment rates cost retailers billions of dollars in lost revenue each year. It believes this gives the company a massive opportunity and appears intent on finding solutions for both retailers and shoppers that ultimately reduce cart abandonment rates.
Judging by its share price appreciation since listing, the market has high expectations for Splitit over the coming years. I'll certainly be keeping a close eye on its progress.
