Splitit shares are still ripping higher on the back of new Mastercard deal

Splitit (ASX:SPT) is the latest buy now, pay later (BNPL) platform on the ASX to rip higher, following news of a partnership deal with global payments company Mastercard.

The company said the “multi-year” agreement would give it the opportunity to leverage Mastercard’s global network and integrate its pay-by-instalment solution.

About an hour after the announcement at 11am EST, shares in Splitit had climbed by 30 per cent and the stock continued to ramp higher in afternoon trade amid a broader selloff on the ASX.

From a price-action standpoint it markets something of a breakthrough for Splitit, which failed to keep up with strong rallies from its BNPL peers during the COVID-19 market rebound.

Since hitting March lows of 25c it rose back above 60c, but those returns pailed in comparison to gains of more than 500 per cent for Afterpay (ASX:APT), Zip Co (ASX:Z1P) and Sezzle (ASX:SZL).

Splitit shares have treaded water since its head-turning debut on the ASX in January 2019, when it IPO’d at 20c and hit an all-time high of $2 shortly after.

The company said Mastercard’s gateway services and Application Programming Interface (API) technology would provide a “systemic, scalable way to offer Splitit’s instalment solution”.

“At this point in time, Splitit is not able to determine the economic materiality of the partnership with Mastercard due to the contingent nature of results that may be generated,” Splitit said.

The deal with a major payments network is another indicator of increased deal-flow in the fast-moving BNPL sector, as various listed competitors battle to establish market share.

In early May, Afterpay announced that Chinese internet giant Tencent had become a substantial shareholder in the business.

This was done via a series of on-market transactions during the pandemic selloff which saw Afterpay shares bottom out at just over $8 (they’re currently trading above $58).

And Zip Co also rose strongly at the start of June, after announcing it had acquired US-based BNPL platform Quadpay for $403m.