Why the Splitit (ASX:SPT) share price is on the move today

The Splitit Ltd (ASX: SPT) share price is up today as the company announced a partnership with competing BNPL provider QuickFee Ltd (ASX: QFE)
The post Why the Splitit (ASX:SPT) share price is on the move today appeared first on Motley Fool Australia. –

hand holding mobile phone about to make credit card payment

The Splitit Ltd (ASX: SPT) share price is trading higher today as the company announced a partnership with competing buy now, pay later (BNPL) provider QuickFee Ltd (ASX: QFE). The Splitit share price is currently trading 0.97% higher at $1.56.

Meanwhile, QuickFee has entered a trading halt after announcing a $17.5 million capital raising to fund its ‘interest free’ partnership with Splitit.

Splitit is a somewhat unique play on BNPL, providing credit card based instalment solutions to businesses and retailers. Conversely, QuickFee offers a payment platform for professional services firms, allowing clients to pay by instalment while the firms receive payment in full. Hence, working in largely the same way as BNPL provider Afterpay Ltd (ASX: APT).

Splitit partners with QuickFee

The Splitit share price is moving higher as the company announced the QuickFee deal would enable the clients of accounting and law firms in the US and Australia to pay their fees on credit cards using Splitit’s instalment solution.

Splitit will be integrated directly to QuickFee’s payments portal, complementing the existing finance offering to clients and firms. Through the new product offering using Splitit technology, QuickFee has an opportunity to expand its customer base to include smaller firms that typically fall outside its credit risk framework. This could grow its addressable market for the new interest free product by 650,000 accounting and law firms in the US alone.

QuickFee share price halted

QuickFee has entered the strategic agreement with Splitit to expand its addressable market. QuickFee is funding the rollout through a placement to raise $15 million, and a share purchase plan that aims to raise a further $2.5 million.

The funds raised will substantially scale up the customer acquisition team, predominantly in the US, to fund the significant anticipated growth of the receivables book with the Splitit opportunity. There will also be money spent on research and development for future product releases.

The new interest free product broadens QuickFee’s product suite in line with the company’s strategy of becoming a market leader in the advice now, pay later market.

What now for the Splitit share price

At this point, it’s difficult for Splitit to determine the economic benefits of the QuickFee partnership due to the contingent nature of results. As such, we can assume the move is an effort to catch up and potentially differentiate itself from BNPL giants Afterpay and Zip Co Ltd (ASX: Z1P). The Splitit share price has been on a tear this year, gaining more 130%, driven by huge revenue growth.

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Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Splitit (ASX:SPT) share price is on the move today appeared first on Motley Fool Australia.

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