Afterpay vs Zip: What You Need to Know

Buy Now Pay Later, BNPL for short, has become one of the newest, most efficient, and most popular ways to get things now but spread your payments out over the weeks or months to come. Usually the BNPL provider that you use depends heavily on which merchant you’re shopping through. Although some merchants, such as Target and Amazon, accept several different providers. So you’re trying to figure out: Afterpay vs. Zip. Here are the major similarities and differences between the two. 

What Are Afterpay and Zip?

Afterpay and Zip are BNPL providers that make it easier for you to buy things from brick-and-mortar or online stores using short-term credit. When you pay with a BNPL provider in-person or through online shopping, you can get what you bought now and then repay the outstanding balance in equal installments, often interest-free, in minimum biweekly or minimum monthly repayments.

From 30,000 feet up, Afterpay and Zip have similar offerings; however, they differ when it comes to the nitty gritty.

How can Cushion help me?
Cushion Bill Pay gives you more visibility and control over your finances than ever before. Many people get hit with bank fees—such as overdrafts and late fees—due to cash flow problems. With Cushion, you can consolidate and track all of your bills and BNPL payments in one place, plan your budget by reviewing what’s coming down the pike, and avoid overdraft fees by temporarily pausing payments that might overdraft your account and resuming them when you are ready.

Major Differences Between Afterpay and Zip

Founding

Afterpay
Afterpay was founded in Sydney, Australia, in 2014. 

Zip
Zip is an Australia-based BNPL provider founded in 2013. It acquired US-based payment installment platform Quadpay in 2020.

Countries of operation

Afterpay
Afterpay operates in the U.S., Canada, United Kingdom, and New Zealand.

Zip
Zip operates in Australia, Canada, Czech Republic, India, Mexico, New Zealand, the Philippines, Poland, Saudi Arabia, South Africa, UAE, and the United States.

Woman shops using BNPL companies

Accepted by

Afterpay
Nearly 86,000 merchants around the world—including Kmart, Target, and Sephora—accept Afterpay. 

Zip
Nearly 26,000 merchants around the world—including Best Buy, Airbnb, and Sam’s Club—accept Zip.

Installments

Afterpay
Afterpay offers a pay-in-four model, which is a standard payment system across most Buy Now Pay Later providers. With this model, you divide four interest-free payments over six weeks. The minimum repayment due at checkout is a quarter of the total purchase price.

Zip
Zip also offers a pay-in-four financing model, which is a standard payment system across most Buy Now Pay Later providers. With this model, you divide the purchase price into four interest-free payments over six weeks, with the first, upfront payment due when you make the purchase.

Rescheduled payments

Afterpay
You used to not be able to reschedule payments with Afterpay. However, the service changed its policy to allow customers to reschedule payments. There are certain stipulations, though.

  • Afterpay does not allow you to move the payment date on certain purchases.
  • You can only move one payment per order.
  • You are technically only allowed to move the second and third payments through Afterpay to align with your cash flow; if you need help moving your first or last payments, you should contact Afterpay customer service.
  • Once the payment is overdue or due within 24 hours, you cannot reschedule the payment.
  • If you have been an Afterpay customer for 42 days or less, you cannot access the rescheduled payment feature.
  • Customers already taking advantage of a hardship repayment arrangement cannot access the feature.  


Zip
Zip offers various repayment schedules. You can choose to pay your installments weekly, biweekly, or monthly depending on what works best for your cash flow. You can also allow Zip to automatically personalize your repayment schedule based on repayment behavior and spending habits. 

You can modify your repayment schedule from within the Zip app. However, modifications take 24 hours to go into effect. This means that if you need to reschedule an upcoming payment, you should do so more than 24 hours in advance in order to avoid a late penalty. The payment can be made up to 7 days late without penalty. When you move a payment date, future payment dates will also be adjusted.

Credit limits

Afterpay
With Afterpay, you can have a balance of $2,000 on your account at any given time; each individual purchase can be a maximum of $1,500.

Afterpay likely won’t extend the maximum limit to new users. They will start you out with a smaller credit limit, and once you prove that you are a good BNPL customer, Afterpay can increase your credit limit.

Zip
Zip Pay is a short-term credit option with a credit limit of up to $1,000. You may be able to increase your credit limit to $2,000 on eligible purchases after being a loyal customer for a certain period of time.

Fees

Afterpay
All sales made through Afterpay are subject to a 4.17% merchant fee. Customers don’t have to pay any hidden fees or account-keeping fees unless they miss a payment or make it late. (An account-keeping fee is simply a fee that you pay in order to keep your account open.)

When you miss a payment, Afterpay charges $10 late fees, plus another $7 fee if your account is not brought current after seven days.

When using BNPL, it’s important to use some sort of budgeting tool to ensure that you are avoiding a late payment and unnecessary fees.

Zip
Zip is promoted as interest-free and does not come with a monthly fee. However, you will be charged a $1 convenience fee per installment. The company also charges late payment fees between $7–$10, depending on your state of residence, if you miss a payment.

Soft credit check or hard credit check

Afterpay and Zip do not do hard credit checks when you make a purchase using the service. Zip runs soft credit checks to get a sense of your credit history and determine if you are eligible for a short-term loan. Soft credit checks provide enough information to give the BNPL services a sense of your creditworthiness without penalizing your credit score with a hard inquiry.

Afterpay, on the other hand, does not run a credit check at all.

How to Sign Up for Afterpay

You can sign up for Afterpay using the Afterpay app, at afterpay.com, or by choosing Afterpay as your payment method at checkout. 

  • Go to the Afterpay website or download the app
  • Enter your email address, phone number, date of birth, valid ID, and a credit or debit card, or bank account number
  • Complete sign-up

How to Sign Up for Zip

There are a couple of different ways to sign up for Zip: download the Zip app or choose Zip as your payment method during the checkout process. 

  • Download the Zip app or select Zip as your payment method when checking out with a partner merchant
  • When prompted, provide proof that you live in the U.S., are at least 18 years old, have a valid mobile phone number, have a valid U.S. debit or credit card, and have a valid U.S. mailing address
  • Complete sign-up

How to Use Buy Now Pay Later Responsibly 

Buy Now Pay Later (BNPL) services allow consumers to make purchases online or in-store by breaking up larger ticket items into a small number of fixed installment payments. BNPL is attractive to consumers because purchases are typically interest-free and don’t involve many of the fees that come with bank accounts and credit cards.

The popularity of BNPL has grown exponentially in recent years—and for good reason. These payment options provide more opportunities for people of underserved and underbanked populations. However, there are also a number of potential risks involved.

Advantages of Buy Now Pay Later

  • You get easier access to goods and services
  • Customers pay low-to-no fees and interest charges on their payment plan
  • You can maintain and build your credit score

Disadvantages of Buy Now Pay Later

  • It is easy to overspend
  • There are potential fees or interest charges and credit score damage
  • Buy Now Pay Later can be difficult to manage
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Frequently Asked Questions

Afterpay vs. Zip: Which is better?

It is not a matter of which Buy Now Pay Later service is better. Rather, it is important to consider whether BNPL is the right choice for you at all.

The service that you use as a customer depends on which merchant or company you are purchasing from and in what country you are located. All brick-and-mortar and online retailers don’t partner with all BNPL companies.

Before deciding to make a purchase with BNPL, it’s important to consider: how much you really want or need the product or service, your budget, and cash flow.

What happens if I never repay Afterpay or Zip?

If you fail to make your scheduled repayments through Afterpay, Zip, or any other BNPL providers, you can run into credit and financial issues. 

Afterpay and Zip both make you pay late fees on missed payments. Your account may also get disabled, meaning that you would not be able to make future purchases with the BNPL service. 

When it comes to late payments affecting your credit, neither BNPL service reports payments directly to the credit bureaus. However, if your accounts are delinquent for an extended period of time, Afterpay and Zip can report missing payments to collections, which can find their way back to the credit bureaus and harm your credit.

Are Afterpay and Zip legit?

Afterpay and Zip are both legitimate and secure services. Both keep customer data safe and sound and act much the same as credit cards, personal loans, and payday loans except with shorter-term repayment plans.

What is an alternative to Buy Now Pay Later?

Given that Buy Now Pay Later is a form of short-term credit, you have other financing options.

One option is to open a 0% interest credit card. This can be ideal for smaller, less expensive purchases. Typically, 0% interest credit cards come with an introductory, interest-free period, meaning that after a certain amount of time, the interest rates will increase from 0% on your minimum monthly repayment, often to above-average interest rates.

If you plan to open a 0% interest credit card for a specific purchase, it’s important that you have a payment schedule in place to regularly make the minimum payment or, better yet, pay off your entire purchase before the credit card provider begins to charge interest. If you don’t, you risk getting charged a late fee or accruing credit card debt.

Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $13 million in bank and credit card fee refunds—and we’re just getting started.

*Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call.

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