Zip is a prominent global player in buy now pay later (BNPL), offering flexible payment solutions to a wide range of customers and businesses. Zip has expanded to serve numerous countries as it caters to a diverse customer base seeking alternatives to traditional credit, reflecting a growing trend among customers who value flexibility and accessibility in payment options.

Zip allows customers to purchase goods and services immediately while spreading out the cost over a series of payments, typically without interest. For businesses, partnering with Zip can mean higher conversion rates and higher average order values, as some customers might be more likely to complete purchases with flexible payment options. This can allow businesses to take advantage of the estimated US$334 billion in annual global BNPL transaction value, a market that’s expected to grow to US$687 billion by 2028.

Zip’s international strategy involves adapting to local market conditions and customer preferences, including in the United States and Australia. As Zip continues to expand, it’s important for businesses to understand how it works, its benefits, and the broader BNPL market dynamics.

What's in this article?

• What is Zip?
  
• Where is Zip used?
  
• Who uses Zip?
  
• How Zip works
  
• Benefits for businesses that accept Zip
  
• Costs and fees for using Zip
  
• Zip’s security measures
  
• Requirements for accepting Zip payments
  
• Alternatives to Zip
  
• How Stripe Payments can help
  

What is Zip?

Founded in Australia in 2013, Zip is a financial service that provides customers with a way to defer payments for purchases. Zip offers customers the convenience of buying goods immediately with the flexibility to spread payments over time. The platform provides buy now pay later plans in three distinct products:

• Zip Pay: A digital wallet that allows customers to spread out the cost of smaller purchases, generally under US$1,000.
  
• Zip Money: A revolving line of credit for larger BNPL purchases. Generally, Zip Money plans are longer-term and can range from US$1,000 to US$50,000.
  
• Zip Plus: A higher-tier digital card that offers credit limits between US$2,000 and US$20,000.
  

Customers can use Zip to make a purchase and then repay the balance in instalments, typically biweekly – a model that can be more in alignment with pay cycles and personal budget management. For businesses, adopting Zip can lead to increased purchase totals and improved customer return rates.

In 2025, Zip reported 6.3 million active customer accounts. Zip integrates with e-commerce platforms and point of sale (POS) systems to provide services in different types of shopping environments. Zip’s growth follows the wider trend of customers seeking alternative payment methods that are more in line with their financial planning and spending habits.

Where is Zip used?

Zip's ability to adapt in response to regional market dynamics has helped solidify its global position.

• Australia: As the birthplace of Zip, Australia has a significant customer base. The platform was initially branded as two separate services, ZipMoney and ZipPay, to appeal to a wider range of customer needs.

• United States: Zip acquired QuadPay in 2020 to expand its footprint in the US and cater to a market with a growing interest in buy now pay later services. This acquisition has allowed Zip to tap into the diverse retail landscape of the US and adapt to its customers’ spending habits and credit behaviour. In the first half of 2025, its US-based revenue reached US$199.5 million, increasing more than 42% year over year.

• New Zealand: New Zealand boasts a robust Zip customer base, which is drawn to the service for its financial flexibility.

Who uses Zip?

Zip is used by a variety of individuals and businesses, but primarily caters to budget-conscious and tech-savvy consumers who might be averse to traditional lines of credit. In 2025, for example, millennials accounted for over half of Zip transactions over the Black Friday and Cyber Monday weekend, followed closely by Generation Z. For businesses—especially in the retail, e-commerce, home, and lifestyle sectors—offering Zip is a great way to increase conversions by offering customers the ability to spread out large purchases.

This payment method is highly popular among credit-averse individuals and gig economy workers with variable income streams who rely on predictable instalment timelines to smoothly align their purchasing power with fluctuating earnings.

How Zip works

• Transaction initiation and routing: A Zip transaction begins when a customer selects Zip as their payment method at a business’s checkout online or in-store. The customer’s information is encrypted and sent to Zip for approval. This request includes the details of the purchase and the customer’s creditworthiness. When the customer is approved, which often happens instantaneously, Zip pays the business the full amount minus a fee, and establishes the customer’s repayment schedule.

• Data security: To protect customer and business data, Zip employs encryption protocols throughout the transaction process. Data security measures are in place to ensure that personal and financial information is protected against unauthorised access and fraud. Zip uses advanced risk assessment algorithms that scrutinise transaction data in real time, which helps mitigate the risk of fraudulent transactions.

• Fee structure: Zip’s fee structure differs from traditional payment networks. Instead of charging customers a fee for each transaction, businesses pay a fee for each purchase made using the service. Zip may also charge customers fees for late payments or account inactivity, depending on their user agreement.

• Integrating with a business’s existing payment systems: For businesses, integrating Zip into their payment options often involves adding the service to their existing payment gateway or POS system. Zip’s application programming interfaces (APIs) and software development kits (SDKs) support this integration and allow for a smooth addition to business’ checkout processes. The platform’s design ensures compatibility with a variety of e-commerce platforms and in-store systems, offering a flexible solution to accommodate different business models.

• Settlement and clearing: After transaction approval, Zip handles the settlement process with businesses. Businesses receive payment promptly, which fosters confidence in the BNPL system. Clearing transactions are batch-processed, ensuring all parties are credited and debited appropriately.

• Customer insights: Zip provides businesses with access to transaction data and analytics, helping them understand customer behaviour and manage their sales data effectively.

Benefits for businesses that accept Zip

• Increased average order value: Businesses using Zip could see an increase in the average order value, because customers might be more comfortable paying for larger purchases when they have the ability to spread the cost over time without interest.

• Improved conversion rates: Zip can reduce cart abandonment rates at checkout. Offering a BNPL option addresses a common barrier to purchase – immediate affordability – and has the potential to boost conversion rates.

• Immediate payment to businesses:Even though customers are paying on instalment plans, businesses receive full payment up-front from Zip. This aspect of the service can enhance a business’s cash flow and reduce the financial risks associated with payment delays.

• Access to a broader customer base: Zip can attract a wider range of customers, including those who are credit-averse or do not qualify for traditional credit.

• Data-driven insights: Zip provides businesses with valuable data about purchasing trends and customer behaviour. This information can inform marketing strategies, product development, and inventory management.

• Low-touch, secure integration: Zip’s technology is designed for easy integration with existing payment gateways and e-commerce platforms for a smooth implementation process while offering high standards of security and regulatory compliance. Additionally, businesses working with Zip may benefit from additional exposure through Zip’s marketing channels, which can increase traffic to their stores or websites.

Costs and fees for using Zip

The exact structure of fees and costs for businesses and customers paying through Zip can vary depending on the region and the specific agreement with the business. It's important that all parties carefully review the terms and conditions of their agreements to fully understand the fee structure.

Note that Zip's fee structure varies by market, product, and merchant agreement. For current fee information, see Zip's official pricing page.

For businesses

Transaction fees: Typically, businesses pay a percentage of each transaction processed through Zip. This fee varies based on factors such as transaction volume and industry type. An additional fixed fee per transaction may also apply.

• Monthly and annual fees: Some service tiers may include ongoing fees. These can cover account maintenance, access to advanced features, or customer support services.

• Chargeback fees: In instances of customer disputes or chargebacks, businesses may be subject to additional fees. These costs cover the administrative effort involved in resolving these disputes.

• Integration and API fees: Businesses that choose advanced Zip integration with their existing systems might incur additional costs. These fees cover the technical support and development required for custom solutions.

For customers

• Late payment fees: Customers who fail to meet the agreed-upon payment schedule with Zip are often subject to late payment fees.

• Account maintenance fees: Some Zip accounts may carry a monthly or annual maintenance fee. This fee is typically linked to the type of account or service level that the customer chooses..

• Interest charges: While Zip offers interest-free periods, certain plans may include interest charges if the balance is not paid within the specified period.

• Transaction fees: Customers might be charged a small fee for each transaction or instalment payment. This fee can vary based on the purchase amount or the specific terms of their plan.

• Fees for cross-border transactions: International transactions may involve additional fees. These are particularly relevant for customers purchasing from overseas businesses.

Zip’s security measures

Zip provides a safe and reliable payments platform for its customers and business partners. The platform's strong focus on security protects transactions while maintaining customer trust and ensuring the service's long-term success. Zip's security measures include:

• Encryption: Zip uses advanced encryption technologies to safeguard data at every point of the transaction process. This includes data in transit, such as during a purchase, and data at rest, such as stored account information. These encryption methods are regularly updated to counter potential cybersecurity threats.

• Fraud detection and risk assessment: The platform employs sophisticated algorithms and machine learning techniques to analyse transaction data in real time. These systems are designed to identify and flag unusual activity that might indicate fraud. By continuously monitoring transactions, Zip can quickly respond to possible security issues.

• Tokenisation: Similar to other leading payment processors, Zip uses tokenisation to enhance transaction security. This method involves replacing sensitive data, including credit card numbers, with a unique identifier (or token) that has no exploitable value. This significantly reduces the risk of data breaches and fraud.

• Compliance with regulations: Zip adheres to relevant financial regulations in each market where it operates. This includes compliance with global standards for data protection and payment processing, such as Payment Card Industry Data Security Standard (PCI DSS).

Requirements for accepting Zip

To bring Zip’s buy-now-pay-later functionality to your checkout, your business must satisfy a few foundational technical, operational, and security baselines:

1. Merchant account setup:You must establish a formal merchant account agreement directly with Zip or an authorised payment partner to govern your payout schedules, underwriting criteria, and standard contract terms.

2. API and SDK integration: Your development team needs to integrate Zip's payment systems into your active checkout flow. For digital businesses, this means configuring Zip's APIs or e-commerce plugins. For brick-and-mortar storefronts, it requires updating your physical POS terminal software.

3. PCI DSS and security readiness: Your technical environment must maintain strict compliance with Payment Card Industry Data Security Standards (PCI DSS) to ensure that customer data packets are protected, encrypted, and isolated during transit.

4. Regulatory and legal compliance: Your business must clear standard financial verification processes, including Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, while adhering to regional data privacy laws.

5. Fee structure alignment: You must review and clear Zip's commercial fee schedules, ensuring your margins accommodate their standard transaction percentages, fixed processing fees, and chargeback parameters.

Alternatives to Zip

Each of the following BNPL services has distinct features and operational models that cater to different markets. Their prevalence and adoption vary based on factors such as regional presence, customer preferences and business partnerships.

How Stripe Payments can help

Stripe makes the setup process easy for businesses looking to add Zip to their checkout. Through a quick integration, eligible businesses can enable Zip as a checkout payment method with a single click directly from their Stripe Dashboard without the need for complex, custom code configurations.

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods and Link, a wallet built by Stripe.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments or get started today.