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 and has a presence in 13 global markets, 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 instalments 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, thousands 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 in-store 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. Well, 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. 

Remember: Zip Money is for purchases over $1,000, so this might not be the go-to choice for that pair of shoes you're lusting over. Think more along the lines of appliances or that chic new couch! When it comes to purchases under $1,000, you'll be looking at Zip Pay - more on that below.

  • Online: 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.

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.

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.

Do I need a credit card to use Zip Money?

We’ll let you in on a secret – you don’t need a credit card to use Zip Money! 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 a standard variable interest rate of 25.9% p.a. You may also have to pay an establishment fee on a Zip Money payment if you are a new customer.

Zip Money and Zip Pay - Buy Now Pay Later
  • Flexible to match your spending needs - Zip Pay for amounts between $350 - $1,000 and Zip Money for amounts $1,000 - $8,000
  • $7.95 monthly account fee (waived if you pay your balance in full each month)
  • Flexible repayment plans offered
Find out more

BNPL giant Zip* has options for both smaller purchases and larger splurges, with Buy Now Pay Later services used by more than 2 million Australians. Its Zip Pay option is available for purchases from $350 and under $1,000 while Zip Money is available for spending between $1,000 - $5,000. Zip Pay is interest free and has no establishment fee. Meanwhile, Zip Money may have a one off establishment fee for new customers, and charges interest at a variable rate of 25.9% p.a. after an initial 3 months interest free (this may be extended by the retailer). For both services, you'll be able to choose between weekly, fortnightly and monthly payment options, and if you pay your closing balance in full each month Zip will waive the $7.95 monthly fee. Zip offers easy in-store and online payments anywhere that Visa is accepted, added to your Apple Pay or Google Pay account.

What about Zip Pay?

Think of Zip Pay as Zip Money’s more frugal sister. The main difference is that while Zip Money is designed for big ticket items, Zip Pay is more geared towards everyday spending with lower prices.

While Zip Pay can be used on purchases between $350 and $1,000, Zip Money is focused on bigger ticket spending, with limits between $1,000 and $5,000. You aren't charged interest on Zip Pay purchases.

Zip Pay shares the same $7.95 monthly account fee as Zip Money, which is waived when you pay your balance in full each month. 

Can using either affect my credit rating?

Any form of Buy Now Pay Later can now impact your credit rating, 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. 

It's important to regard all BNPL purchases as borrowed money, and not to engage with them lightly - if you don't have a way to pay off your purchases, you could end up feeling the impact much further down the track.

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. 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.

You can opt to make additional payments, which will pay off your BNPL debt faster and clean your slate. You will not be charged for making additional repayments, and these can be very useful if you happen to have more money on hand. In the case of Zip Money, extra repayments made during the interest free period can save you on interest you pay in the long haul.

Can I choose the repayment frequency?

Yes! Unlike many other Buy Now Pay Later services, where repayments are set on a fortnightly or monthly basis, with Zip Money you’ll have the option to choose the frequency that suits you (weekly, fortnightly, monthly) as soon as you’ve authorised a purchase. 

Is Zip safe and secure?

Like other popular Buy Now Pay Later services, Zip 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 services 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 medium to large sized purchases and can afford to keep up with your instalments, 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 25.9% 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). This is also an option worth considering for smaller purchases (between $350 and $1,000) when you want the flexibility of choosing how frequently you will make your repayments.

If you’d like to find out how other Buy Now Pay Later services stack up to Zip, check out our comprehensive Buy Now Pay Later hub. For a wrap up of some BNPL winners, take a look at our Best in Buy Now Pay Later.

*Zip Money: Available to approved applicants only. Minimum monthly repayments are required. Paying only the minimum monthly repayment amount will generally not repay out the purchase within the interest free period. Any balance outstanding at the expiry of the interest free period will be charged at the standard variable rate, 25.9% per annum as at 1 July 2022 and is subject to change. A $7.95 monthly account fee applies. A one-off establishment fee may apply for new customers. Terms & Conditions apply and are available on application. See your contract for further details. Credit provided by ZipMoney Payments Pty Ltd (ABN 58 164 440 993, Australian Credit Licence Number 441878). T&Cs apply.

^Card Terms & Conditions apply.