While it's common for payment companies to partner up to build their audience, Splitit contends its work with the Chinese payment app provider Alipay is much more ambitious.
"We can get to people that we can't get to today, through Alipay," said Nanden Sheth, Splitit's CEO. "They are a dominant force."
Splitit, which offers point of sale credit and payment processing, has
Installments will first be offered on AliExpress, Alibaba's global e-commerce marketplace, in Germany, France and Spain. Alipay is operated by Ant Group, an affiliate of Alibaba.
Splitit will use Checkout.com's payment technology to enable shoppers to pay with their existing credit card, with Splitit powering the installment option in the checkout flow. The Alipay collaboration includes an option for the seller to be paid in full upon delivery. Splitit pays the bill, then collects from the consumer using the card that's attached to the consumer's Splitit account. There is also a more typical installment plan, with the difference between the two plans coming from the merchant fee.
Unlike most buy now/pay later firms, Splitit accesses a consumer's unused credit card balance to fund installments, rather than extend new credit. Splitit takes a
In offering credit after delivery, AliPay and Splitit are attempting to differentiate e-commerce from the normal practice of processing payments or extending credit at the point of sale, said Zack Levine, vice president and head of revenue for North America at Checkout.com.
"There's pain points that come up with delays, or pickup, where consumers have paid before," Levine said. "This is alleviated with pay after delivery. Our hope is this will change consumer behavior by offering an experience that's more pleasant."
The partnership comes as
Alipay has about 1.3 billion users, with about 300 million outside of China, according to
Alipay, Alibaba and AliExpress have a long history of
The BNPL function is being loaded onto the AliExpress retail platform, which is similar to Amazon or Rakuten, said Thad Peterson, a strategic advisor at Aite-Novarica, adding a focus on online sales outside of China will give AliExpress a boost.
"From that perspective it's really a value-added offering that helps AliExpress to stay competitive," Peterson said. "Since AliExpress is a large, global digital retailer, it does expand the availability of BNPL, and helps to ensure that BNPL is now table stakes in digital commerce."
AliExpress had about 450 million visitors per month in the last three months of 2022, according to
"It's one of the largest and most sophisticated global marketplaces," Sheth said.
In the coming months, Spliitit plans to add more countries and products to the Alipay integration, such as B2B buy now/pay later lending. Businesses will be able to use installments to finance supplies purchased through Alibaba, then sold to consumers. There's also the potential to offer installments to consumers from China who are traveling internationally or making e-commerce purchases from sellers outside of China.
The BNPL market in China, which totals about $83 billion, is expected to reach $338 billion by 2028, according to
Ant Group is among the companies that offer BNPL lending in China. There are some challenges. As in many countries, Chinese regulators have put pressure on
Offering Splitit in China or to Chinese travelers is a potential expansion, and not part of the current rollout. U.S.-based payment companies often face
"BNPL for Chinese consumers is something that we're thinking about with the new partnership," Sheth said, adding more international travel to and from China following the country's pandemic reopening will create additional opportunities to process payments and offer installments. "It's a long-term initiative. We want to be very thoughtful about how we do that."
