Unnamed Big Four lender partners with interest-free provider zipMoney
The deal will see one of the Big Four banks enter into a $200 million financing arrangement with zipMoney.
Interest-free payments provider zipMoney announced a key partnership that will generate $200 million in financing, and while the lender is unknown, the deal represents a further foray into the fintech space.
zipMoney will receive a $200 million asset-backed securitisation warehouse program for consumer receivables, allowing the company to continue its rapid growth and penetration of new markets.
CEO and managing director Larry Diamond says it is a transformative step for the company.
"We have a clear strategy to capitalise on the very large market opportunity and this is a key milestone that demonstrates continued execution of that plan," he said.
"As well as creating the capacity to fund the growing demand for our services, it will approximately halve the weighted average cost of capital of our loan book, which directly contributes to our bottom line."
The interest-free space has been growing in Australia, with Afterpay and Openpay making waves lately.
Just last week, Afterpay merged with payments system firm Touchcorp, forming a new public company.
zipMoney allows customers to make purchases at partner retailers and interest-free repayments over a three- to 12-month period. After the initial promotional period, a standard annual percentage rate applies.
The new financing facility is expected to be in operation from the fourth quarter of 2017.
Interest-free loans are a way to get what you want when you don't have cash. Find out how they work.
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