Westpac eyes interest-free payments market, invests $40m in zipMoney
This fintech equity investment is one of the largest in Australia.
Today, interest-free payment platform zipMoney has announced that it has secured a $40 million strategic investment and relationship with Big Four bank Westpac by way of a private share placement. The strategic partnership will allow both companies to explore the integration of zipMoney's products and services across Westpac's network.
zipMoney is a part of the burgeoning interest-free finance market and currently offers two products, zipMoney and zipPay. This most recent investment follows on from a $200 million financing arrangement between NAB and the company in late February.
The strategic investment from Westpac, which is comprised of $40 million of upfront cash and $8 million in performance options, will be used to accelerate zipMoney's growth plans and will allow the fintech company to develop new products and technologies. This includes investing in its data science and proprietary decisioning capabilities.
CEO and managing director of zipMoney Larry Diamond has said that the deal with Westpac is a transformational moment for the company.
"Things are changing so quickly: the rise of millennials, increasing competition and customer demands and the question of what comes after credit cards. Fintech and Zip represent a pathway to the future for the major financial players who are looking to stay ahead."
"Zip will benefit from Westpac's expertise, its 200-year history and the power of its distribution capability to help fuel our growth."
Interest-free payment platforms are finding favour with consumers. Zip's platform alone has recently seen record quarterly results with users reaching 665,000 and transactions on the platform topping $300 million.
Westpac group executive, strategy and enterprise services Gary Thursby echoed Diamond's comments, saying Westpac is excited to be working with a fintech company that has a strong vision for the future of payments in Australia.
"Zip's real-time data analytics and proprietary platform offer customers seamless payment solutions. We look forward to working with Zip to develop these capabilities and to offer Westpac customers more choice in the changing payments landscape."