Australian buy now, pay later player Zip posted significant growth in the United States as the company doubled down on a strategy to be a buy now, pay later provider for U.S. residents living paycheck-to-paycheck.
Sydney-based Zip saw its U.S. revenue climb 42.3% year-over-year to $199.5 million for the first half of the company's 2025 fiscal year, which ended Dec. 31.
Total transaction volume for the company as a whole was up roughly 24% year-over-year to $6.2 billion for the first half of the 2025 fiscal year, Zip said in its an earnings release on Feb. 25.
Zip attributed the jump to strong holiday spending in a summary of the first half results posted on its website.
U.S. CEO Joe Heck also attributed the increase partly to partnerships with companies like Valvoline and Best Buy, where Americans pay for necessities and buy household items like laptops. Another partnership, with the auto service chain Take 5 Oil Change, began in the first half of the fiscal year, Zip said. And on Monday the company announced a partnership with Gamestop, a chain of video game stores.
Buy now, pay later has long been associated with fashion and big ticket purchases, but Heck said Zip caters to consumers making more common purchases like groceries, or spending on emergencies like car repair.
"I always use the example of a flat tire," Heck said in a Feb. 28 interview. "When you're living paycheck-to-paycheck and you get a flat tire, you have this mental gymnastics you've got to take on. You say 'Hey, do I deploy my cash there, or do I deploy it on groceries?'"
Zip also has partnerships with grocery stores and retailers like Best Buy, where customers can make big and small purchases, ranging from appliances to electronics, he said.
"The simplest way to think about the way we look for partnerships is we look for where everyday Americans spend their time and money," Heck said.
BNPL arrived in the United States over the past decade when companies like Affirm and Klarna started offering their services. But the service became mainstream in the U.S. during the COVID-19 pandemic when shoppers increasingly spent money online.
Zip is one of the smaller BNPL players, competing with more well-known buy now, pay later firms like Klarna, Affirm and Block’s Afterpay. The company posted annual revenue of about $539 million for its fiscal year 2024. Affirm, by comparison, posted annual revenue of $2.3 billion for its fiscal year last year.
Just over 9% of U.S. consumers said they had used BNPL in the previous month in the fall of 2023, according to a Federal Reserve Bank of Boston survey of about 4,200 consumers that was released in May. That was an increase from 8% in the same time period in 2022, and 6.6% from 2021.
Figures like those and the payment method's relatively new entrance into the U.S. market make Heck believe that the payment option has plenty of space to attract new U.S. customers.
"This is a simple, easy to understand payment vehicle for consumers to use," he said. "And I think the adoption rate is going to continue to pick up in the U.S."
Zip reported a net profit of $14.3 million for the first half of the fiscal year, which is a drop from the $45.2 million in net profit from the first half of the 2024 fiscal year.
The company reported first half revenue of $316.9 million, a roughly 20% increase from the $264.8 million it reported for the first half of the 2024 fiscal year.
