- Zip will now be accepted everywhere Visa is, as part of a new licence deal with the payment giant.
- Zip users will be able to tap and go using their phones to pay for purchases, rather than having to scan QR codes.
- CEO Larry Diamond said it enables “Zip to compete with credit cards at every checkout in Australia”.
- Visit Business Insider Australia’s homepage for more stories.
Buy now pay later company Zip will now be available wherever Visa is accepted.
Granted a licence with Visa, Zip will be able to issue Zip-branded virtual cards, allowing shoppers to tap their phones to pay.
Zip CEO Larry Diamond said while BNPL growth had been”phenomenal” in recent years, it had been “restricted by a clunky in-store checkout experience”.
“We are excited to announce Tap and Zip, which completely changes the game, enabling Zip to compete with credit cards at every checkout in Australia,” Diamond said.
While Zip doesn’t disclose its exact store penetration, BNPL platforms are accepted by just 13% of Australian stores.
This latest deal would suggest that Zip could be used essentially everywhere , as it launches Apple Pay and Google Pay functionality.
It comes as BNPL providers continue to usurp the throne traditional credit products, like credit cards.
RBA data shows Australians are turning their backs on high-interest debt, closing nearly 400,000 credit accounts in the first few months of the pandemic.
Diamond said the tap format “marks the future of BNPL”, by creating payment options “that are accepted everywhere”.
Since March, cash use for regular purchases has declined sharply, with contactless payment becoming more prevalent. Beyond that, Visa country manager Julian Potter said customer transactions are protected by Visa’s own security layers.
Curiously, the partnership appears to throw cold water on the theory that Visa and Mastercard would simply create their own BNPL alternatives. Rather than disrupt them, the payment giants appear to be open to some level of collaboration instead.
NYU professor Scott Galloway may have to eat his words yet.
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