Is Zip Pay Better Than Afterpay? Here's Your Answer

Is Zip Pay Better Than Afterpay? Here's Your Answer

The ability to pay for purchases in instalments over time has revolutionised online shopping for many Australians, and while there are a number of buy-now-pay-later services available, two are always top of mind: Afterpay and Zip Pay.

So, which is the best?

Do they both charge interest?

Are there any hidden fees?

We decided to take a dive into all things Zip Pay and Afterpay to get some definitive answers on which, if any, is the better flexible payment service for Aussie shoppers.

What are "buy now, pay later" services?

Think of them like a credit card, only without the hefty interest payments. It differs to layby because you actually get your items straight away.

In short, financial services like Afterpay and Zip Pay allow account holders to buy a product, making only one initial payment, with the rest to be paid in instalments over a period of time.

The account is managed through a use-friendly app, and linked with the account holder's chosen bank account or debit card for smooth repayments.

It's very handy!

The beauty of paying in instalments is that shoppers don't need to wait and save, nor do they have to incur high interest payments as they would on a credit card; they get their hands on those must-have goodies faster, and can spread out the payments so that they are more manageable.

How does Zip Pay differ from Afterpay?

From the outset, it may appear that both of these flexible payment methods are essentially the same, and while the concept certainly is, the details of each service has a number of differences.

Consider the main difference between Zip Pay and Afterpay below to establish which works better for you.

Zip PayAfterpay
Account Fees:$6 fee added each month unless account is paid in full, in which case it is waived. None.
Late Fees:If the minimum payment is not made within 21 days, account holder are charged a $5 late fee. Late fees are charged on any missed payments at a minimum of $10 and maximum of $68 (or 25% off the purchase price).
Minimum Repayment:$40 required each month. 25% of the purchase amount required at the time or purchase, and every two weeks thereafter for a total of four payments.
Interest Payable:None with Zip Pay. (Note, there is interest payable with Zip Money and higher account limits.) None.
Account Limits:Less than $1000 (or more than $1000 with Zip Money) Determined by Afterpay based on what they know about you and your account.
Early Payments Allowed?Yes. Yes.
Repayment Period:On-going at a minimum rate of $40 per month until paid in full. Eight weeks.
Are In-Store Purchases Available?Yes. Yes.
Account Management:Via FREE Zip Pay app. Via FREE Afterpay app.
Repayment Schedule:Payments can be made weekly, fortnightly or monthly as long as the $40 monthly minimum is covered. Payments are made every two weeks.
Eligibility:Australian resident aged 18 years or over and a holder of a Facebook or Paypal account, debit card, and mobile phone number. Australian resident aged 18 years or over with a valid email address, phone number and bank debit card.

Where can Zip Pay and Afterpay be used?

Both Zip Pay and Afterpay are offered at a number of major stores in Australia, such as Best & Less, Officeworks and Target.

That said, the majority of Australian stores still offer either one or the other. Take a look at some of the major stores that offer Zip Pay and Afterpay:

  • Major Zip Pay stores: Rebel, Bunnings, Catch, Kogan and Spotlight
  • Major Afterpay stores: Big W, Sephora, David Jones, Myer, THE ICONIC and Kmart

Is Zip Pay Better Than Afterpay?

Truth be told, it very much depends on the individual.

If you are very likely to pay your account in full each month, then Zip Pay offers a potentially longer period within which to make payments, as opposed to Afterpay which is rigid about the eight-week purchase window.

However, Zip Pay's $6 account fee (unless paid in full each month) makes it the less favoured option if larger purchases are involved that need more than a month to be paid in full.

In terms of stores, Afterpay is offered in more of Australia's major retailers than Zip Pay, but with an ever-growing store directory under each company, we expect to see more and more retailer offering both in the near future.

Online shoppers have different habits, frequent many different stores, and have varied financial backgrounds. Because of this, we suggest taking a look at the following three questions when establishing whether to go with Zip Pay or Afterpay:

  • Which stores you shop at most frequently?
  • Will you be able to pay your account in full each month?
  • Do you prefer making payments of equal amounts (Afterpay), or a low minimum payment monthly (Zip Pay)?

Finally, make sure to read the terms and conditions of any financial service before you sign up.


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