Microsoft Store customers can now pay in installments with Zip Co

Fans of the Microsoft Store will be pleased to hear that they can now purchase new tech and avoid being hit with a big bill straight away. If you don’t want to, or simply can’t offload $1,000 in one go, then the option to split the payment into installments could be a welcome relief.

Although more and more retailers are giving customers the option to use a Buy Now Pay Later service, Zip Co is the first BNPL provider the Microsoft Store has partnered with. Now if you haven’t used any Buy Now Pay Later service before, you might be wondering how Zip Co works.

The lowdown on Zip Co

To pay with Zip at the Microsoft Store you will first have to have a Zip Co account. You can sign up either via the Zip website or by downloading the Zip app. Once you do this, you’ll have to choose between a Zip Pay account or Zip Money account. 

Here’s a quick rundown of the two:

• Zip Pay: This is an ‘interest-free’ online shopping wallet. It comes with a credit limit of up to $1,000, meaning you can’t have any more than this owing at one time (you can apply to have your limit increased to $1,500). When you have payments outstanding on your account, there is a $6 monthly fee. 
• Zip Money: More suitable for bigger payments, on Zip’s website it is described as a ‘line of credit.’ The payment limit is over $1,000 and it comes with 0% interest for three months. This account also comes with a $6 monthly fee when you have money outstanding.

Let’s compare the costs associated with both of these:

The $6 monthly fee will only be charged if you have money outstanding at the end of the month - if not it will be waived. Zip Money purchases are interest free for three months, after which interest will increase to a fairly hefty 19.9% p.a. 

Some purchases with Zip Money may qualify for a promotional interest free period of up to 60 months. Although it is definitely a good idea to check this before putting anything in your cart.

Microsoft Store and Zip

You can use either Zip Pay or Zip Money when purchasing from the Microsoft Store online. However, if you are buying a laptop or surface, you may have to opt for Zip Money as there’s a high chance your bill will be over $1,000.

If you feel yourself leaning towards Zip Money, there are a few things you should know about making repayments.

Number one, the minimum monthly repayment for Zip Money users is $40. However, this may be more if your particular credit limit is higher - i.e. the higher your limit, the higher your minimum monthly repayments will be. The next thing to know is that your repayments will generally be due the day after you accepted the contract with Zip. This means that if you accepted it on the 2 May, your repayments would be due on the 3rd every month after that.

If you want to pay off your purchases ASAP and avoid being hit with interest, you can change your repayments to weekly or fortnightly. You can also pay more than the minimum amount.

Digital stores lead at Microsoft ANZ, Michelle Casey said the decision to partner with Zip is part of the company’s commitment to provide greater access to Australians, especially students. 

“We are excited to venture into the BNPL ecosystem with an innovative fintech partner who shares the same vision of making technology a more available resource. This is a necessary step following a sharp increase in customer demand towards tailored payment options in the Australian market,” Casey said.

Want to learn more about Buy Now Pay Later? Head to Mozo’s Buy Now Pay Later hub for more information on how these payment services work or check out our BNPL statistics report.