The Splitit Ltd (ASX: SPT) share price has continued its remarkable run on Wednesday and surged to a new all-time high.
At the time of writing the payment company's shares are 14% higher at $1.18. This latest gain means the Splitit share price has risen an incredible 490% since listing on the ASX at 20 cents per share on January 29.
The Afterpay Touch Group Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) rival now has a market capitalisation of approximately $320 million.
Why has the Splitit share price rocketed higher?
With no news out of the company, I suspect investors have been buying Spiltit's shares on the belief that it could be the next Afterpay Touch.
Splitit is an Israel-headquartered payments company providing a cross-border credit card-based instalment solution to businesses and merchants.
Its service allows consumers to pay for a product using their existing credit cards but divide the total purchase cost across as many interest-free monthly payments as they feel is necessary, up to a limit of 36 months.
Debit cards can also be used, but consumers are limited to $400 of credit and must repay the balance through a maximum of three interest-free monthly payments.
Another service the company offers which separates it from the competition is a try now, pay later service. Merchants can allow shoppers to try out items for up to 90 days before any payment is charged to their credit card.
The item cost is put on hold on the shopper's credit card to protect the merchant, ensuring that payment is made in the event that the shopper does not actively finalise the purchase or return the item. If the shopper decides to return the item, the hold is released, and the shopper is not charged any interest or fees.
What now?
Last week Splitit released its preliminary final report which revealed full year revenue of US$790,000 and a loss after tax of $4.4 million. Clearly it is still early days for the company, but it could be worth keeping a close eye on its progress in the coming years.
