With the rapid increase in popularities of buy now pay later services, it hard to skip any. After writing Klarna vs. Afterpay, it’s time for another similar blog post. Zip Pay is available in multiple countries, and just like Afterpay, it is increasing at a fast pace. How do both differ? The blog post takes a more in-depth look into both and covers Zip Pay vs. Afterpay (2020).
Table of contents
Quick Zip Pay vs. Afterpay comparison
Here is a quick comparison table of Zip Pay and Afterpay.
|Availability||Australia, New Zealand & UK||Australia, New Zealand, UK & USA|
|Starting limits||$200 to $1,000||$200 to $500|
|Sign up||Email, Phone, Credit Check & Debit Card||Email, Phone, & Debit/Credit Card|
|Repayment period||4 weeks||6 weeks|
|Frequency||Weekly, Fortnightly & Monthly||Fortnightly|
|Minimum payment||$40 (initial)||25% of the full payment|
|Missed payment charges||$5/Month||$10/Per Missed Payment|
Both are available in minimal countries. Zip Pay is only available in Australia, New Zealand, and now in the UK. It will acquire a US-based buy now pay later company called QuadPay to start actively in the US, but it’s not done yet. Some of the US websites offer Zip Pay as a payment method, though. According to the official Zip website, 19,000 merchants offer Zip as the payment option.
Afterpay contrarily is available in the US, UK (Clearpay), Australia, and New Zealand. In recent months, it has grown huge and made deals with several merchants. Currently, over 48,000 merchants offer Afterpay as a payment method.
To sign up on either, you must be at least 18 years old. The sign-up process of Zip Pay is a bit tricky. They ask to provide:
- Phone number
- Account details or debit card (for a credit check)
There is not any establishment fee, but they might charge a small amount to verify the account. You must have a good standing, and in some cases, you must be earning at least $300 weekly to be approved. Signing up with Afterpay, on the other hand, is straightforward. You will need:
- Phone number
- Debit/Credit card
Once you have provides those details, Afterpay will charge a small amount to verify the payment method.
Just like the sign-up process, the usage is similar. To use Zip Pay online, you can select the Zip Pay as the payment method. While paying, a new window pops up where you can log in with your account details. You see some information, such as your account status, minimum payment etc. Before the payment processes, you get a code on your phone to verify that it’s you. Once that completes, the transactions automatically process.
To pay in-store, you generate a barcode in the app. The temporary barcode then casher scans and the amount deducts from your Zip account.
An additional way Zip offers is allowing to BPAY. BPAY is a payment processing system which is found almost everywhere in Australia. You can BPAY your utility bills, university fee, credit card repayments, and even pay your fines. Zip Pay offers this feature, but there are some terms and conditions. Usually, when you BPAY with your account, you are not overcharged. For example, if a bill is for $32, then you will BPAY $32. Zip charges a flat $2.5 fee on every BPAY transaction. It also does not support all the merchants.
With Afterpay, online and in-store usage is the same as Zip Pay, and it does not support BPAY. Sometimes Afterpay charges the first payment instantly even before the transaction, and if for any reason the app can’t process the payment, the transaction declines.
With limits, the terms are bit different. Zip does a credit check before offering the limit. If your score is low, you’ll get less than $500, and if your score is high, you will get more than $500. The maximum you will get with Zip Pay is $1,000. If you get a lower limit, you can request to increase after some time. They also offer you to increase the limit when you are eligible.
Afterpay does not do any credit checks, but they only offer $500 in the beginning. There isn’t any increase limit option, but after a few purchases, your limit automatically increases. The maximum limit Afterpay offers in Australia is $1,500.
Watch: What are Zip Pay and Money
This is where the comparison gets tricky. Zip Pay offers flexible terms in which you can take months to repay. You have to pay the specified minimum monthly limit though. When you use the money, you get 30 days to pay back for free, and after 30 days, you are charged a $6 monthly fee. If you even can’t pay the minimum, you pay an extra $5 after a few days after the due date. You can pay weekly, fortnightly and monthly.
Afterpay charges the first payment on the first day, and the rest are every fortnight. If you miss an instalment, you are charged a $10 fee, and if you can’t clear that payment within seven days, you are charged an additional $7. Afterpay does not show any user rating, but not paying on time may lead to no increase in the limit.
Which one is for you?
I will suggest using Afterpay. Why? Well, Zip works like a credit card, and when you apply for any loan or a new credit card, it counts towards your credit check. Afterpay is used for personal shopping which does not count as much as Zip. But, if you feel that you can clear the money quickly, then why not signing up with both?
Sign up with Zip Pay and get $5 to $10 for free.
The comparison Zip Pay vs. Afterpay covered the essential features of both. I hope it helped you differentiate between the two. Please let me know what you think of both in the comments and subscribe to the newsletter for the future updates.