The Splitit Ltd (ASX: SPT) share price has dropped lower with the market on Monday despite the release of a reasonably positive update from the buy now pay later provider.
At the time of writing the Afterpay Ltd (ASX: APT) rival's shares are down 5.5% to 34 cents.
This leaves them trading within touching distance of their all-time low of 31.5 cents.
What did Splitit announce?
This morning the global payment instalment technology company advised that it has yet to experience any material impact from COVID-19 on its merchant sales volume or revenue.
While it acknowledges that COVID-19 is likely to result in softer consumer spending, management notes that it has seen strong growth in new merchants and partnerships.
It also remains well positioned financially with a cash balance of $16.3 million as of December 31 and an external factoring facility in place. Management also points out that its unique business model means its exposure to credit losses is negligible.
Splitit's business model allows customers to pay for purchases with an existing debit or credit card by splitting the cost into interest and fee-free monthly payments, without the need for additional registrations or applications.
Coronavirus response.
As we saw with buy now pay later peer Sezzle Inc (ASX: SZL) earlier today, Splitit has also implemented a number of actions following the outbreak. These include recommending employees work from home and suspending all business travel.
Splitit's CEO, Brad Paterson, appears positive on the future despite the coronavirus outbreak.
He commented: "As a business primarily focused on eCommerce, we are well positioned to help existing and prospective customers in these uncertain times. Responsible use of credit for shoppers, on their terms, is more relevant now than ever before. We are working closely with our merchants and partners to help them improve conversion and the experience for their customers."
