Splitit is quickly adding new customers and merchants thanks to the coronavirus pandemic

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The buy now, pay later (BNPL) provider processed over $65 million in merchant sales volume (MSV) in Q2 2020, skyrocketing 260% year-over-year (YoY) and 176% compared with the previous quarter, per a press release sent to Insider Intelligence.

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Its MSV growth is coming from both customer acquisition and increasingly large purchases: The firm’s customer base now exceeds 309,000 users — up 85% YoY — and its average order volume (AOV) grew 21% quarterly. Further, Splitit continues to build out its acceptance network, which grew 104% YoY to over 1,000 merchants.

The coronavirus pandemic is driving new interest in the BNPL space from both consumers and merchants, boosting both Splitit’s performance and that of its competitors. The pandemic has caused US unemployment to spike and created an uncertain financial future for many consumers, likely increasing demand for the payment flexibility offered by BNPL solutions.

And merchants are flocking to these services to provide customers with the payment options they want so they can drive sales even as consumer spending struggles and in-store retail falters. These factors are behind Splitit’s MSV growth as well as the recent successes of competitors like Afterpay and Klarna.

Splitit appears to be trailing other BNPL providers in terms of scale, but its recent slew of partnerships could help it grow quickly.

• Both Afterpay and Klarna appear to dwarf Splitit’s user and merchant bases, making it difficult for Splitit to establish itself as a leader in the BNPL space. Afterpay claims 8.4 million active customers and 48,400 active merchants around the world, while Klarna counts 7.85 million customers in the US alone and over 200,000 merchants globally. The disparity between Splitit’s customer and merchant bases and those of its competitors could make it difficult for Splitit to build a loyal customer base because consumers may find that Afterpay and Klarna are available for more merchants they shop with, leading them to use their offerings instead.
• But Splitit has partnered with several major payments players that should give more merchants the option to offer its solutions, potentially helping Splitit scale rapidly. Splitit has teamed up with firms including Mastercard, Visa, Stripe, and Shopify to enable their millions of merchants to offer Splitit, giving Splitit the chance to catch up to its competitors. And card networks may be particularly interested in pushing Splitit’s offerings as opposed to other BNPL solutions because Splitit lets users pay with credit from their existing credit cards, potentially giving Splitit an advantage as it tries to expand its business.

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