How does Zip Money work? Read this before you sign up


Love shopping up a storm? Then you’ve probably notice more retailers offering the Buy Now, Pay Later (BNPL) payment platform, Zip Money*. At the time of writing, this BNPL service has more than 2 million customers across Australia and New Zealand, so it’s safe to assume Zip Money is here to stay. 

It might sound like a great idea to take home your goods and pay for them over time, but it’s important to know exactly what you’re signing up for. So in case you wanted a bit more info, this guide will run you through the must-knows of using Zip Money.

What is Zip Money?

Zip Money is a BNPL payment service that enables shoppers to spread the cost of their in store or online purchases. Once a customer makes a purchase, Zip Money then pays the upfront cost to the merchant. The shopper then repays Zip Money in either weekly, fortnightly or monthly installments until the balance is cleared. As a result, the customer gets to enjoy their purchase instantly, while paying back their purchase interest-free (for the first three months).

Who offers Zip Money?

As Zip Money has surged in popularity over the years, hundreds of retailers have signed up to join the fun. You can use this BNPL at a range of stores, like Amazon, Target, Harvey Norman, Just Jeans and more.

Zip Money also has a Shop Everywhere^ feature within their app. This allows you to shop at just about any retailer through a single-use card that is created at the time of purchase. All you need to do is add items to your cart and hit 'Pay with Zip' at the checkout! 

How can I use Zip Money?

As this BNPL can be used both instore and online, the way you use the service differs ... let’s break it down. 

At the shops:
Say you’re window shopping at Westfield and those designer shoes you’ve been eyeing off for weeks finally goes on sale. The bad news is, you don’t have the funds to cover the cost of the purchase at the time, what do you do?

Provided the store offers Zip Money, all it takes to make the shoes yours is to simply pay with your active Zip Money account, via the app on your smartphone. 

If you don’t have one, signing up is easy, and as long as Zip Money doesn’t require more info from you to approve the application, your account could be up and running within minutes.

With Zip Money, you can do your shopping within its app (otherwise known as its digital wallet), making online shopping a breeze. All the brands you’ve come to know and love who offer Zip Money are listed on the official app, so you can make virtual purchases on the go when you’re logged in. The same applies when it comes to online shopping at participating retailers, just look for the Zip Money icon or follow the prompts when checking out your shopping cart.

How do I sign up?

On the official Zip website or through its app. Zip will need to confirm your ID, so they’ll probably ask for your driver’s licence number, along with your bank account details and home address.

Zip Buy Now Pay Later
  • Weekly, fortnightly or monthly instalment options
  • $6 monthly account fee (waived if you pay your balance in full each month)
  • Choice between two accounts limits to match your spending needs

With more than 2 million customers across Australia and New Zealand, Zip* is one Buy Now Pay Later that packs a punch. First off, customers have the option to choose their account limit that best suits their spending needs. Zip Pay is available for purchases from $350 and under $1,000, while Zip Money is for spending over $1,000. And not only do customers have the flexibility to use Zip both instore and online, but there’s also the opportunity to choose your repayment frequency as either weekly, fortnightly or monthly.

Do I need a credit card to use Zip Money?

We’ll let you in on a secret – you don’t! However you must have an Australian bank account that will allow you to make automatic repayments with Zip Money, as it’s the only payment method they’ll accept (with the exception of BPAY when it comes to using the extra repayments feature).

Does Zip Money charge interest?

Zip Money will always give you at least 3 months to repay your debt interest free, with some retailers offering longer interest free periods. After this period, you will be charged an interest rate of 19.9%.

What about Zip Pay?

In addition to Zip Money is Zip Pay - think of this one as Zip Money’s frugal sister. The main difference between the two is its account limits and fees. It’s up to you to determine which account type best suits your spending needs. 

Zip Money is generally geared toward larger types of spending, as it features an account limit above $1,000. With this account, you won’t be charged interest on your purchases for the first three months before it jumps to 19.9%. There is also a $6 monthly account fee, which is waived if you keep your balance at zero, plus depending on your credit limit, you may be subject to a one-off establishment fee, from $25.

On the other hand, Zip Pay offers an account limit of between $350 - $1,000, meaning smaller types of spending. And although there’s also the same $6 monthly account fee (doesn’t apply when the balance is cleared), this account never charges interest on your spending.

Can using either affect my credit rating?

Yes it can, but it all comes down to the way you use the account. 

When you first sign up to a Zip Money or Zip Pay account, Zip may perform a credit check to ensure you are a credible customer to use the service. From there, if you start to default or miss your repayments, Zip may report these negative behaviours, which could result in a black mark on your credit history. 

However, as long as use the account responsibly and make your repayments on time, you shouldn’t need to worry about your Zip account impacting your credit rating.

How do I make repayments?

Unless you want to make additional repayments, you won’t need to lift a finger, as your repayments will have already been scheduled in at the time of purchase. Just make sure there’s money in your account when your repayments are due, as your repayments are paid via a direct debit from your nominated account.

Can I choose the repayment frequency?

Yes, unlike other Buy Now Pay Later services where repayments are set, with Zip Money you’ll have the option to choose between weekly, fortnightly or monthly repayments as soon as you’ve authorised a purchase. 

You can also take advantage of the additional repayments feature, which gives you the ability to pay down your remaining balance before the installment date.

Is Zip Money safe and secure?

Like other popular Buy Now Pay Later services, Zip Money are subject to the Privacy Act 1988 (Cth), plus the Australian Privacy Principles (APPs) and wherever necessary, the Privacy (Credit Reporting) Code 2014

All of these laws outline the standard rights and obligations BNPL’s have around their customers’ personal information and the way it is used, including collection or disclosure of information to governance. 

You can learn more about how BNPL services protect and store you personal details by having a read of our Buy Now Pay Later safety and security article.

The verdict:

If you’re someone who plans to use this Buy Now Pay Later for small to medium size purchases and can afford to keep up with your installments, Zip Money could be a great option for you. Just keep in mind that if you are unable to pay off your purchase within three months, you will start to attract the 19.9% interest rate. 

In the event that you don’t want to take the risk of ever having to pay interest on your purchases, Zip Pay may be the better option for you, as this account features zero interest (lower account limit applies).

Or if you’d like to find out how other Buy Now Pay Later services stack up to Zip Money, check out our comprehensive Buy Now Pay Later guide.

This guide was written in collaboration with Ceyda Erem and Roisin Kelly-Goldsmith.  

*Available to approved applicants only. Minimum monthly repayments are required. Paying only the minimum monthly repayment amount will not pay out the purchase within the interest free period. Any balance outstanding at the expiry of the interest free period for the purchase will be charged interest at the contractual rate, currently 19.9%. A $6 monthly account fee applies. A one-off establishment fee may apply. Available to approved applicants only. Terms & Conditions apply and are available on application. See your contract for further details. Credit provided by ZipMoney Payments Pty Limited (ABN 58 164 440 993, Australian Credit Licence Number 441878).

^Card Terms & Conditions apply.