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SPT - Splitit Payments

Discussion in 'Stocks Q-Z' started by System, Dec 27, 2018.

  1. System

    System Administrator

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    Splitit Payments is a technology company providing a cross-border credit card based instalment solution to businesses and retailers. The Company provides a payment service that can be fully integrated into a merchant's payment system. The Splitit payment platform was launched in 2016 and seeks to:
    • target worldwide retail markets with a focus on online credit card sales;
    • enable merchants to offer end-customers instalment based payment options without requiring customers to complete a credit application or qualify for a new credit line;
    • provide merchants with a tool to increase sales, increase average order values and reduce cart/checkout abandonment; and
    • provide customers with the ability to "buy now and pay later" by utilising their existing credit card, without incurring interest, late fees or other fees.
    It is anticipated that SPT will list on the ASX during February 2019.

    https://www.splitit.com
     
  2. greggles

    greggles I'll be back!

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    Splitit Payments off to a good start on its first day on the ASX. Offer price was 20c and it is currently trading at 31.5c.

    The share price was boosted by a Business Operations Update released this morning which showed substantial increases in new shoppers and merchant transactions.

    screenshot-stocknessmonster.com-2019.01.29-11-14-53.png
     
  3. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    at first look its just an app really. Don't think much of it.
    Any one disagree?
     
  4. citac

    citac

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    Hey Knobby,

    It's has some huge upside, as millennials aren't are massive fans of Credit Cards, this is would be more popular with Gen X and Baby Boomers who make up +65% of the spending market(not to say millennials wouldn't adopt this product).

    I'm in the millennial bracket and prefer Credit Card actually, I could imagine how useful the option to spilt a bigger payments up would be for young families or budgeting house holds. also the older age brackets are more aware at managing monthly payments compared to the millennials.

    One thing going for the business it has the credit card businesses on it's side, compared to isolating them as the competition.

    Like most people I had to buy in the morning as I missed out on the offer.

    Good luck
     
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  5. Smurf1976

    Smurf1976

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    I don't know much about this one in particular but there seems to be a boom underway with payment systems of this nature in general. There are differences between them but as a broad concept it seems to be an emerging thing.
     
  6. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    I had a look at it more closely.
    Basically you need a credit card to use it. You can use multiple credit cards.
    The company gets money from the merchant. The credit card authorises the payment.
    The company lets you split the payments up to 24 months with no interest. The credit card company sends the bill. I think if you miss a payment you go back to the credit cards onerous standards.
    My question is who would use it? I would think only people with cashflow problems. Effectively another classic credit trap that people are trying to avoid with companies such as Afterpay. I could easily see someone running up multiple credit cards and getting in major trouble.
    I can't see it taking off.
     
  7. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    Wish I had bought some though, well done Citac. :)
     
    citac likes this.
  8. citac

    citac

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    Thanks Knobby,

    Good luck to all, luck is always involved in loss making businesses.
     
  9. JTLP

    JTLP

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    Flying again today. Is this not just an Afterpay competitor?
     
  10. citac

    citac

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    Hi JTLP,

    Crazy movements in it's first couple days of trading something like a 45% swing today from top to bottom. I hope it is a huge competitor to afterpay, we will have to wait and see.
     
  11. JTLP

    JTLP

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    Would like to understand the business in more detail. Does appear to be growing though.
     
  12. bigdog

    bigdog Retired

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    https://www.livewiremarkets.com/wires/is-splitit-the-next-afterpay

    Is Splitit the next Afterpay?
    [​IMG]
    Dean Fergie View the contributor's profile page
    Cyan Investment Management

    Splitit (ASX:SPT) has had an incredible debut on the ASX since its listing on the 29th January 2019, with the stock galloping from its 20c IPO price to an intraday day high of 74c before settling at 55c on the 31st January; an extraordinary 175% two-day gain.

    It’s been a profitable pathway for these interest-free consumer payment splitting companies, with Afterpay (ASX:APT) shareholders having enjoyed a 15-fold gain in only 2.5 years. So, is the early excitement about this new player justified? I'll discuss some similarities and differences between the two.

    Arguably, the major factor differentiating the offerings is that Splitit customers must have a valid credit card (Mastercard or Visa) with an appropriate limit, to make a purchase using the Splitit system.

    Critically Splitit does not assume any of the credit risk; this resides with the credit card companies. Depending on the merchant’s requirements, the Splitit payments are then charged to the credit card over the following 2 to 36 months.

    Also, depending on the merchant agreement, each payment will be made to the merchant only at each monthly payment event. As such, Splitit is targeting higher-end, higher-value purchases; think jewellery, travel, homewares, sporting goods and high-fashion with an average value of around $1000.

    In contrast, Afterpay made its market entry by targeting lower-end apparel sales. Even after moving up the value chain, the average sale is still only around $140. Afterpay allows customers with both bank accounts and credit cards to use their system.

    It pays the merchant the total value of the goods upfront, thereby taking on the credit risk, but enforces a much shorter payment term of just 6 weeks. Partly because of the credit risk, Afterpay is able to charge a greater merchant fee of around 4%, versus the 1.5% fee Splitit charges.

    For investors, the real concern/opportunity is the markedly different life-cycle stage of the two businesses. Afterpay in now an established, proven, profitable global business. Splitit has but 12 months of modest revenue generation. But, for that, investors are paying a fraction of the price of its successful competitor.

    The table below details the broad financial comparisons that show, despite the huge market debut for SPT, the current valuation not wildly overdone.

    [​IMG]
    However, the law of small numbers is important to remember. Even small market share gains by Splitit would make the business look significantly more attractive on a relative basis.

    But until it becomes cash-flow positive (we estimate growth of about 6x their current annualized sales), there is certainly more risk to its business model.
     
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  13. citac

    citac

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    I do prefer the way its structured compared to Afterpay, and the audience it is targeting, also the international growth that could occur through credit cards.

    Reaching an additional x6 annualised sales isn't far fetched, however it is not proven and has a long way to go.

    it will have a slower adoption model because of the demographic, so that must be taken into account also.

    I no longer hold, awaiting more news.
     
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  14. citac

    citac

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    With a market cap of 54million @ 20c from last week, Fast forward to today it traded 12million dollars worth of stock in one day?
     
  15. JTLP

    JTLP

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    Thanks for the synopsis. Few things I’m considering:
    - credit cards are reportedly declining?
    - will laws differ for this compared to after pay RE: responsible lending?
    - will merchants sign up as readily for this?

    AFT is a sleek, well branded outfit. This needs to follow suit.

    DNH either.
     
  16. Bris Vegas

    Bris Vegas

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    People need to read the Terms of Service.

    Splitit actually 'reserves' (deducts) the full amount from the buyers credit card up front. The merchant gets paid in installments.

    https://www.splitit.com/legals/splitit-shopper-terms-conditions/united-states/
    • Current Installment Payments. If Buyer is paying by Installment, then Buyer authorizes Seller to hold an authorization against the Buyer’s card for the Purchase Price, adjusted each month, based on the payment Installments to date until the Purchase Price is paid in full to Seller.
     
  17. Bris Vegas

    Bris Vegas

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    Splitit HQ is just a co working space in Tel Aviv.
    32 HaArba’a Street Tel Aviv, 6473970

    http://saronaspace.com/


    Their US and UK offices are also co working spaces.
     
  18. citac

    citac

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    To me that's a good thing, getting to use the benefits of your credit card limit, instead of out laying a bigger amount in one payment the purchaser still uses their limit, however its spilt up into more affordable and manageable pieces without additional costs?

    The company is a start up i'd hope they are keeping costs as stream line as possible since they still running at a loss. Working co-op or shared spaces is becoming the norm for most starts ups.

    What would you expect from a software that is designed to be used at the payment system between check out?
     
  19. citac

    citac

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    Australia has a credit problem, so I don't see in the immediate future a huge decline as credit cards enable flexibility, where as a payment system to your debit account instantly reduces available money.
    https://www.finder.com.au/australias-personal-debt-reported-as-highest-in-the-world

    The three countries above Australia have outstanding free education yet have high personal debt as the standard of living is so expensive.
     
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  20. luutzu

    luutzu

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    Any idea why it's listed on the ASX and not in Israel or the UK? Or listed there also?

    These payment, credit and splitting pays is just a fad. It's just a modern way to get people to spend on things they really couldn't afford.

    That's all fine and good, as a business, if you got collateral. But to do it in an environment where OZ are among the most indebted people in the world, going through the most expensive property boom in the world, and are struggling to make ends meet...

    To give credit without collateral, making it quick and easy, might sound smart. It's just asking for trouble.

    But then its share price is doing really well... just like those dotCom etc.
     
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