Zip Co lands Amazon Australia deal, sending shares sky-high
US giant Amazon adds Zip Co's buy now pay later platform to its Australia site.
Zip Co Ltd has been signed up to Amazon Inc's Australia unit. This makes Zip Co the first "buy now pay later" service to be partnered with Amazon in Australia. As of today, Zip will now be featured on Amazon Australia as the first Aussie platform of its kind.
Seeing Amazon Australia added to Zip's already extensive list of 16,200 retailers is a historic achievement. The result has been a surge in shares for Zip of over 20%. The company leapt from $1 at the start of 2019 to $5.86 last month. As part of the deal with Amazon, an affiliate of Amazon will be issued with warrants to buy as much as 14.6 million of Zip's shares.
Also read: How to buy Zip shares
"We're thrilled to offer Zip customers access to more than 125 million products on amazon.com.au. Amazon is a best-in-class retailer and Zip is looking forward to being able to give its customers a flexible way to pay," said Zip CEO and Managing Director, Larry Diamond. "The agreement with Amazon Australia demonstrates that Zip is no longer an alternative, but a mainstream payment option."
This monumental achievement for Zip comes in the wake of regulatory scrutiny last month by the Reserve Bank of Australia and financial crime watchdog AUSTRAC. This just goes to show that despite the criticism and suspicion, the popularity of buy now pay later platforms doesn't look to be ebbing anytime soon.
Buy now pay later companies continue to make headway even in the now-saturated market, with new providers springing up regularly. These interest-free finance companies help give retailers a boost by bringing more traffic to their brands both online and in-store. This can be particularly useful for smaller businesses, that may be constantly battling against larger corporations for visibility.
Interest-free finance platforms also offer an attractive option to shoppers, particularly those within the millennial and generation Z demographics. Instead of getting a potentially higher cost credit card, consumers are able to spread the cost of their purchases over a more manageable period. Also, as long as they pay on time, often no additional costs are incurred.