Zip Expands Pay-in-4 Platform with Launch of Zip Card
With demand for “buy now, pay later” services still proving strong, the BNPL platform Zip has revealed its latest offering. Previously known as Quadpay, the Australian FinTech has announced the launch of Zip Card in the United States. Using the card, customers will be able to utilize the company’s “Pay-in-4” service nearly anywhere Visa is accepted. The Zip Card is issued by WebBank.
According to Zip, following a pilot program for the card, 90% of customers stated that the product made in-store shopping easier. Prior to this physical card’s launch, users would need to use a digital card, meaning that retailers would need to accept mobile payments in order for consumers to use Zip for their purchases.
Looking more closely at the offering, there is a $35 minimum purchase for the card. Additionally, a $4 installment fee will be charged at the commencement of purchases. This fee will be applied across each payment, so a $200 purchase would be financed over the course of four $51 payments (for a total of $204). Payments are due every two weeks starting on the day of the purchase.
In a statement about the card’s launch, Zip’s U.S. Chief Marketing Officer Jinal Shah said, “The Zip app lets customers use the pay later service pretty much everywhere… even on shopping sites where Zip is not at the checkout option. With the Zip Card, we are offering customers access to another fair, transparent payment method in a familiar format to use in-store, specifically at stores that do not accept contactless or mobile phone payments.”
Zip isn’t the first BNPL to explore expansion into physical card options. This summer, the Swedish company Klarna launched its Klarna Card in the U.S. Similar to the Zip Card, Klarna’s offering also gives customers the ability to split purchases into four payments — and Klarna Card customers can delay the down payment the platform typically requires. Also notable is that the Klarna Card does have a monthly fee of $3.99, but this is currently waived for new customers during their first 12 months.
While mobile payment acceptance is growing — meaning that the base Zip product could be utilized at a number of retailers — it does make sense that some customers would require or prefer a physical card. That said, the $4 installment fee is an obvious downside that users might not anticipate. Because of this, it will be interesting to see if the Zip Card catches on among BNPL fans.