Ann: Q1 FY23 Results Update - Zip Taking Control, page-46

Hopefully Zip will get some volumes out of the Qantas deal. I see it most used for small businesses based on airline market demographics:

Budget leisure (usually younger people travelling domestic, maybe a trip to NZ or Bali)

• Willing to use BNPL services but market dominated by Jetstar and Virgin Australia.
• Jetstar promotes Afterpay instead and is typically more price competitive than VA
• VA promotes Zip but with no payment surcharge I suspect margins are very slim

Premium leisure (usually 50+, long haul international travel to Europe)

• Unlikely to use BNPL services, total fares often exceed Zip credit limits (beyond even the $500 co-payment limit)

Visiting family and relatives (usually first/second generation immigrants to Asia)

• Useful for lower income segment given difficulties accessing traditional credit, though tech literacy potential issue.
• However, Qantas does not have high VFR market share in price sensitive markets (e.g. BKK, CGK, MNL)
  
• Higher income households would likely avoid Zip given the 1.5% surcharge and high levels of personal savings.

Sole trader/small business travel (usually interstate capital city domestic travel)

• Sole traders/new businesses tend to have difficulties accessing traditional loans so would be useful for cash flow.
• Surcharge not as much of an issue due to being tax deductible
• Established small business owners could use business credit cards for rewards instead.

Corporate travel

• Usually have corporate accounts and credit cards, not a volume generator for Zip.