I read somewhere that APT is charging less than 4% in the US due to competition, so I’m sure this has been factored in. As will all financing, it’s about volume & the US can provide that.
I think the issue Zip needs to address is ZipMoney. Financing kitchens, windows etc on 3, 4 & 5 years interest free isn’t that profitable. Customers will pay it out on time and as Zip doesn’t attach the line of credit to a credit card (like Latitude & Fllexigroup do), they are missing out on the everyday spend on credit cards which draws in interchange fee revenue & interest on purchases. Long term interest free also means the funds are tied up for years before Zip can make any money on expired interest free balances turning to interest bearing & that’s if customers don’t refinance the balance via mortgage.
They are better off just using their funds for the ZipPay business which provides quicker revenue
Ann: Quarterly Report and Appendix 4C, page-50
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