Zip Buy Now, Pay Later Review 2023

GOBankingRates Score

4.6
SCORE
GOBankingRates Best Banks 2023 scores and rankings are objectively determined by our research/editorial team. Our scoring formula weighs several factors that differ from category to category depending on what consumers want from varying products and banks.
Our take: Zip Pay, formerly known as QuadPay, is an alternative to credit cards and installment loans. The buy now, pay later app lets you apply for installment payments on purchases. The first 25% of the balance is due on the spot with three additional interest-free payments due over the next six weeks.
  • Loan Amount
    4.5
  • Fees
    4.8
  • Features
    4.6
  • Payment Flexibility
    4.5
How did we calculate this?

Pros

  • Low fees split between installments
  • Pay 25% down and the remainder in three additional installments
  • Interest-free payments
  • No credit check
  • The Zip mobile app works at nearly any retailer that accepts Visa

Cons

  • You'll need approval for each purchase you'd like to pay later
  • You need a credit card for installment payments to be eligible debit cards don't count
  • Installments only no early lump-sum payments
  • Late payments cost $7

Zip Overview

Zip started in 2017 as an alternative to credit cards and installment loans. The payment platform allows you to apply for installments on purchases, scheduled as an upfront payment of 25% of the balance and three additional interest-free payments over the next six weeks.

Zip charges $4 to $6 for each purchase. That’s $1 to $1.50 per installment instead of the interest charges you’d typically pay using a credit card or loan. You’ll need to “apply” each time you want to pay later by choosing the platform as your form of payment, but you’ll receive an answer instantly. Having multiple installment loans at once is possible, as long as you can afford them.

When you use Zip, you won’t have to worry about hard credit pulls affecting your credit score. Zip doesn’t check your credit to approve your installments.

There are two ways to use Zip.

Zip at Checkout 

Available at participating online retailers and using the Chrome extension, choosing this method tells you how much each installment is during the checkout process. You’ll need to:

  • Provide your cellphone number to receive a confirmation code. 
  • Enter the code.
  • Enter some personal information to verify your identity, such as your date of birth. 
  • Wait for approval of the purchase. 
  • Once approved, enter your credit card details for repayment so your installments can be automatically charged to the card provided.

Zip Mobile

Using the mobile app expands the possibilities of where you can shop. You can buy items online or in-store anywhere Visa is accepted. When you’re out shopping:

  • Open the app.
  • Choose whether you’re paying online or in-store.
  • Enter the retailer’s name and location.
  • Tap on “Create a Card”.
  • Enter a total for the purchase request based on how much you think you’ll need for the purchase.
  • It’s better to overestimate the amount — you’ll get a refund if your estimate was too high. Otherwise, your request will be denied.
  • You’ll receive a decision right away.
  • A “credit card” for the purchase will appear in your mobile wallet to pay with.
  • The first installment of 25% will be charged to your credit card at the time of purchase. The other three installments will be spread out over the next six weeks.

Key Features

Zip earned its score of 4.6 out of 5 stars with the following features.

Loan Amount

Zip limits loans to $1,000. Other apps offer higher amounts, but Zip’s spending limit works for most everyday purchases. One caveat — you’ll need to request the amount you believe you need. Always request a bit more for the purchase, just in case; you don’t need to spend it all if you’re approved.

Fees

Zip limits fees to two: late fees and finance charges.

Late fees are $7. Finance charges are split into two categories: $4 for purchases between $35 and $99.99 and $6 for larger amounts. You’ll pay an initial $1 or $1.50 upon purchase, with the remaining balance split in the upcoming three payments.

Features

Instant approval is available through the app before you go shopping or make a purchase — just provide an estimate of how much you’ll need. Use Zip nearly anywhere — the app will work wherever Visa is accepted.

Payment Flexibility

You can make payments using the following:

  • Debit cards
  • Credit cards
  • Apple Pay

Plus, you can change the payment due date in the app to one that’s more convenient.

How Zip Stands Out

Zip is a good way to break up larger transactions into budget-friendly payments. You won’t have to worry about high interest rates or late fees unless you provided a credit card that declines — the process is automated and your payments will be charged to the credit or debit card you provided over the next six weeks.

Comparable BNPL Options

Zip isn’t the only platform providing installment payments for purchases. Compare how Zip measures up.

Platform Best For Fees
Zip Interest-free payments $4 for purchases between $35 and $99.99 and $6 for larger amounts
Affirm Longer repayment periods Between 0% and 30% fixed, simple interest
Afterpay No fees None
Klarna Flexible payment options No interest when paid in four installments or in 30 days; Up to 28.99% APR on six- to 24-month financing

Zip vs. Affirm

Both companies provide you with the option to pay for your purchases in installments, but Affirm offers longer terms — up to 24 months. The drawback is that Affirm works more like a credit card, charging you interest of up to 28.99% APR. Zip’s flat-rate pricing is a better deal if you can repay your balance in six weeks.

Zip vs. Afterpay

Afterpay also sets up your purchases into four installments. The main difference is that Afterpay won’t charge you any fees, so you’ll save yourself the $1 to $1.50 per installment you’ll pay when you choose Zip. Don’t be late on your payments with Afterpay — you’ll get hit with a late fee of up to 25% of your order’s value.

Zip vs. Klarna

Klarna has a similar setup to Zip and its own list of participating retailers, but it gives you more options. You can pay back your purchase in four installments; choose to pay the full balance in 30 days after the item is delivered; or go with up to 24-month traditional financing like a credit card or loan — if you don’t mind paying interest.

How To Apply

To get started, download the app.

You’ll need to request the loan for each purchase. Because each transaction is reviewed for approval, you may not always receive positive news. You can have multiple purchase installments open — as long as you can afford to repay the items over six weeks, you shouldn’t have an issue.

Who Zip Is Best For

Zip is ideal for anyone due to its flexibility. You can get instant approval through the app before you go shopping by providing an estimate of how much you’ll need. Best of all, you won’t be limited to certain retailers — the app will work anywhere Visa is accepted.

Final Take

The concept of buy now, pay later isn’t new, but it’s definitely more innovative today. Zip makes it simple and affordable to pay back your purchase by applying for installments. You don’t have to worry about forgetting to make payments or keep up with the multiple purchases you’ve set up for Zip — the installments will be charged to your credit or debit card when they’re due.

However, it’s important to understand the risks before you use a buy now, pay later program. BNPL can lead to overspending, insufficient funds fees on your bank account or credit card and significant late fees if you’re not careful. Manage your money carefully, and only use buy now, pay later if you really need to.

Zip FAQ

Here are the answers to some commonly asked questions about Zip.
  • Is Zip the same as Afterpay?
    • Zip and Afterpay are separate buy now, pay later apps. However, Afterpay doesn't charge any fees.
  • How does Zip pay work?
    • Zip works by offering loans for purchases. You'll need to apply for the loan through the app or Chrome extension for the amount you'll need. Zip will approve or decline your request nearly instantly.
  • Does Zip run your credit?
    • Zip runs a soft credit check, which will not affect your credit.
  • How do you qualify for Zip pay?
    • To qualify, you'll need to apply for an amount between $35 and $1,000. You'll receive a response quickly so you can make the purchase.

Information is accurate as of Dec. 27, 2022, and is subject to change.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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About the Author

Cynthia Paez Bowman is a personal finance writer with degrees from American University in international business and journalism. Besides writing about personal finance, she writes about real estate, interior design and architecture. Her work has been featured in MSN, Brex, Freshome, MyMove, Emirates’ Open Skies magazine and more.
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