DXC Technology and Splitit Collaborate for Flexible Payments
In a groundbreaking partnership, DXC Technology (NYSE: DXC) and Splitit are reshaping the payment ecosystem by allowing banks to offer installment payment options to their account holders. This collaboration targets over 300 million bank account holders, enabling them to enjoy seamless checkout experiences while leveraging the trusted branding of their financial institutions.
The Power of Seamless Installments
By merging DXC's Hogan core banking platform with Splitit's innovative technology, banks can now provide dynamic installment plans tailored to individual consumer needs. This integration helps banks not only to compete with the rapidly growing Buy Now, Pay Later (BNPL) market but also to enhance the experience for their existing customers. Consumers can benefit from flexible payment options that utilize the cards and accounts they already trust, both online and in physical stores.
Creating New Revenue Streams
According to Sandeep Bhanote, Senior Vice President and Global Head of Financial Services at DXC, the partnership aims to modernize banking offerings without the need for banks to overhaul their core systems. "For decades, Hogan has been the backbone of the world's largest banks. This partnership shows how that foundation can create new revenue streams at the point of sale," he said.
Addressing Market Shifts
With more than 80 percent of retail purchases still occurring in-store, the advent of BNPL providers has presented significant challenges for banks. Traditional BNPL solutions often require creating new accounts or are not accessible to consumers using debit cards. The recent collaboration between Splitit and DXC seeks to address these issues head-on.
Key Benefits for Banks
The partnership facilitates a range of advantages for banks:
- Control Over Offerings: Banks can quickly roll out branded installment solutions powered by DXC's Hogan platform, which can be integrated directly into checkout experiences, all without requiring third-party accounts or additional loan applications.
- Inclusive Access: The program allows all bank account and debit card holders to enroll in these installment plans, widening access to more consumers.
- Lending Flexibility: Banks have the choice to fund the installment plans either directly or via Splitit as a lending partner, enabling tailored strategies for their lending products.
- Revenue Growth: By introducing fees on installment plans and maintaining consumer engagement, banks can achieve predictable and scalable growth in revenue.
- Support for Merchants: Splitit's network allows merchants and wallets to leverage bank-backed plans effortlessly, reducing the need for multiple integrations and the associated lending risks.
Empowering Financial Institutions
Nandan Sheth, CEO of Splitit, emphasizes that this collaboration will empower banks to reclaim their roles in the lending space. "BNPL players have disintermediated banks by offering transactional lending at the merchant checkout. This partnership resets the playing field," he stated.
The segmentation of the installment payment market reflects a rapidly growing sector, projected to rise from $2.23 billion to $3.44 billion by 2031, exhibiting a CAGR of 6.4%. The expanding demand for card-linked installment plans suggests that financial institutions must adapt to meet the evolving needs of contemporary consumers, particularly Generations Z and Millennial customers who prefer debit and flexible payment solutions.
About DXC Technology
DXC Technology is a leading global provider of information technology services and is known for its innovative solutions designed to propel organizations forward. The company supports various industries by optimizing their processes, managing significant workloads, and integrating AI capabilities into operations, ensuring security and trust.
About Splitit
Splitit has redefined the installment payment landscape, enabling consumers to use their existing credit for flexible payment solutions. The company, operational in over 100 countries, allows merchants to streamline their transaction processes, ultimately aiding in increasing order value and conversion rates.
Frequently Asked Questions
What is the purpose of the DXC and Splitit partnership?
The partnership aims to enable banks to offer installment plans to their account holders, enhancing payment flexibility and competition with BNPL providers.
How will this collaboration affect bank account holders?
Bank account holders will have access to flexible installment payment options directly tied to their existing accounts and cards.
What benefits do banks get from using the DXC platform?
Banks can quickly implement customized installment offerings, improve their revenue streams, and regain customer relationships lost to BNPL solutions.
What is the projected growth of the installment payment market?
The market is expected to grow from $2.23 billion in 2024 to $3.44 billion by 2031, with an annual growth rate of about 6.4%.
Who can enroll in the installment payment plans introduced by this partnership?
Any consumer with a bank account or debit card can enroll, not just those with credit cards, expanding access significantly.
