do i think the model would work better with higher limit with convienence fee still there.
thats a 2 sided argument for me.
yes for the fact it will drive up ttv/revenue by allowing larger purchases. like tvs, hotels stays, golf clubs ect it would also create better value for users paying the convienence fee. if i buy a set of clubs for 2k the $4 fee is nothing. if i buy a coffee, the fee almost doubles the price. but increasing the ttv in this manner wont be reflected equally in revenue as it will have a lower ROI.
no because you risk larger amounts becoming bad debts, although all credit providers have this risk the ones that charge customers more will be prioritised last for repayment in preservation of least expensive options. from what ive seen on some zip discussions alot users look to zip to buy visa debt cards to pay down other bnpl debt. shifting debt from a preferred bnpl to less preferred, of even juggling debt between the services they use,, which will eventually catch up on them.
the convienence fee in USA is standard accross all transactions and if the merchant is partnered then they pay a fee also (this is how zip are able to get margins at 6-7%.) (SPECIAL NOTE - some merchants add the merchant fee to the bill for the customer also, meaning the customer will pay the convienence fee and the merchant fee for using zip.)
In Canada they use a model called MFPP (merchant fee for paymant plan) in which the merchant will pass on a % of the transaction fees which can be up to $12 per transaction i believe)
one metric id love to see is the number of customers who become inactive over each period. it would be a great measure between all bnpl.
i do wonder if thats why growth in raw numbers is flat for zip, are people signing up and only realising the fee later then dropping the service? customer satisfaction will be key to keeping user with each service. convienence fees wont help here..
i agree with zip biz needing to be rolled out in usa. its not part on zip business i know well so i limit my opinion on it. but since they have bothered to make it they should roll it out. maybe still in trial mode?
if i was running zip, oh that is tough. i would 100% want to differentiate the model from the competition. i would stop buying pay in 4 competitors and focus on something more like the aus model. i think the purchases of quadpay was a necessary move not to fall behind the leaders. it set them up with licencing to operate and a head start on customers. but the quad model itself wasnt working. apt overtook them very quickly.
i would possibly layer zip users, maybe something like
free users - can only shop at partnered merchants (this would still encourage merchants to partner up to access bigger customer pool) - still have monthly fee is balance not paid off ($8) - no payment schedule change available - payment by bank/debit only (no CC) - lower limits.
subscription users say ($99/year) - can shop anywhere - add rewards - allow 1 late payment per year with no charge - allow payment by cc (letting users collect rewards on cc) the subscription cost will offset cc fees to zip) - access to more promos and bigger discounts. black friday sales ect - annual bonus. - lower monthly fee (say $6 instead of $8 (free user) - higher limit - entry to competitions (like the 5k give aways recently) - auto partnership with discount app like "honey"
subscription members will have more reason to use it more regularly.
anyhow those are just quick thoughts
Z1P Price at posting:
$1.64 Sentiment: None Disclosure: Not Held
(20min delay)