Splitit shares rise as operator BNPL improves margins

By Stuart Condie

SYDNEY – Shares of Splitit Payments Ltd. jumped 9.1% after the buy-it-now-pay-later operator said it widened margins and cut expenses for its second fiscal quarter.

The New York-based payments company said on Monday its net margin on transactions for the three months ending June increased to 1.33% from 0.15% a year earlier. It reduced operating expenses for the period to US$5 million from US$6 million.

The stock, which like other installment payment providers has sold off strongly since Apple Inc. announced a similar service in June, last rose 6.1% to 17.5 cents. Australian (11.9 US cents). It went up to 18 Australian cents.

Splitit said second-quarter transaction value on its platform rose 4% to $94 million, even as it exited high-risk and unprofitable merchants.

It expects sales volume and revenue to improve towards the end of 2022 through the adoption of its so-called white label strategy, which allows merchants to use the service under their own brand.

Chief executive Nandan Sheth said merchants are attracted to Splitit’s model, which offers consumers interest-free installments against untapped credit on existing card accounts.

“Our differentiated business model that unlocks existing credit for merchant-funded payouts becomes the most viable alternative to high-risk, high-friction legacy BNPL services,” Mr. Sheth said.

Write to Stuart Condie at stuart.condie@wsj.com