These items have been uploaded and published about the subject

Zip Pay

POS SOFTWARE

Recently Buy now, pay later (BNPL) service providers such as Afterpay and Zip have experienced dramatic growth. With many of our clients, these now make up a large proportion of their sales.  It is predicted that soon as the big banks enter this market, their growth will significantly increase.

Yesterday the Commonwealth Bank of Australia CEO commented on Afterpay and other such BNPL providers.  Some of his remarks would be of interest to our readers here.

What he stated was that "companies like Afterpay and Zip are charging very high merchant fees of up to 7%." He also complained that merchants should be able to pass this fee to the consumer. If you read the refutal by two BNPL providers in the link, neither disputed these claims.

Today in most business, BNPL is low-cost to the consumer as they are paying most of it. A BNPL platform like Afterpay or Zip charges a typical client of mine about 7% of the transaction amount. This is much higher than other forms of payment, such as debit and credit cards. Plus, unlike debit and credit cards, it is hard for them to charge a merchant fee.

The principal way merchants can recoup this cost is to increase their prices to cover the merchant fees. 

Often most accept the loss because of the BNPL's lead generation and because it's a cheaper and better option than their layby service.

There are two big questions on BNPL. I am wondering:

1) If the government allows merchants to charge the BNPL costs, how many customers would use them?

2) How many merchants will use Afterpay or Zip if the big banks come into this space with merchant costs of .5% to 2%. This what they are talking of doing now?

I am hoping that the big banks do come into this space ASAP.

Anyway, have a read and let me know what you think?

Add new comment

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
CAPTCHA This question is for testing whether or not you are a human visitor and to prevent automated spam submissions. Image CAPTCHA
Enter the characters shown in the image.
POS SOFTWARE

Zippay can now be directly integrated into our Westpac EFTPOS link. 

This may be useful for those that sell product through Amazon in particular as Amazon now accepts Zip.

The big plus, with zip is that by using it you are giving your customers the power to pay later interest-free with little risk to you. 

If you are interested let me know.

 

 

Add new comment

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
CAPTCHA This question is for testing whether or not you are a human visitor and to prevent automated spam submissions. Image CAPTCHA
Enter the characters shown in the image.
POS SOFTWARE

Christmas is coming, it is less than two months away and I was talking to a few clients who do a lot of laybys, their laybys are down, way down on last year. 

I decided to check with google trends, as to what the Australian market thinks.

Layby vs afterpay over the past three years

It is clear that a market shift is underway.  The figure is even bigger for "Buy now, pay later" model as I could not include zip because zip is a common term used for other things so it is fair to say that this yellow line should be twice that height. 

I decided to just look at the layby by itself and got this.

Layby interest over 3 years

The green line is the trend and you will notice that it is straight down. 

How are your laybys doing? Believe me, if you are doing well with them you are an exception.

If you are counting on using laybys this year, I doubt there will not be much. The closer it gets to Christmas, the worse it is going to get as laybys need time to work and the time is running out.

Every store needs now a "Buy now, pay later" option, it does not need time, you can pick when you want to use it, you are under no obligation and it costs you nothing to have it. Plus these, in general, are very good customers to get.

Image removed.

 

We have arranged a very good offer from Zip for our clients, which includes a good rate, marketing information and signs as an introductory with no obligation to try it out. I suggest you look into it. Click here  if you want more details.

Note the recent announcement from one of our competitors that they are going to offer zip and afterpay too as well as oxipay, confirms that their customers are reporting the same thing and have similar needs to our clients.


 

Add new comment

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
CAPTCHA This question is for testing whether or not you are a human visitor and to prevent automated spam submissions. Image CAPTCHA
Enter the characters shown in the image.
POS SOFTWARE

Direct bank deposit

In an effort to reduce banking costs, some people have asked us instead of Zippay can they offer a direct bank account system as cash is slowly declining.

Payment methods Australia

The short answer is *YES*, maybe and no.

The first point is you do not want to create what we call any type of friction if someone wants to pay with a particular payment method then I suggest you give them that option, particularly as it is an easy and cheap option plus it does offer what every business needs to provide a fee-free way to pay.

The problem is that today people want an immediate solution, that is the problem with laybys nowdays too which is on a steep decline. 

A direct bank deposit takes time, while the other methods like PayPal, Credit cards, Afterpay or ZipPay are instant.

 

Add new comment

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
CAPTCHA This question is for testing whether or not you are a human visitor and to prevent automated spam submissions. Image CAPTCHA
Enter the characters shown in the image.
POS SOFTWARE

PosBrowser has launched a new facility for you and your clients. We now offer a Zip Pay payment type directly built into the PosBrowser register.  This week we were joined by Andreas Collier from Zip pay to discuss and demonstrate how easy it is to setup and use as well as answering a bunch of question you may be interested in hearing. 
Watch the video and see what you think. 
Also as a special offer to PosBrowser user, Andreas will personally handle the process of getting your ZIP PAY account activated and the details you will need for integrating ZIP with PosBrowser.   Just contact him via email andreas.collier@zip.co 

If you find this video helpful or you have any question please reply in the comments. Also check out our blog often to see what the next webinar is going to cover in our weekly sessions or make a suggestion for a topic you'd like to hear more about. 

 

 

Add new comment

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
CAPTCHA This question is for testing whether or not you are a human visitor and to prevent automated spam submissions. Image CAPTCHA
Enter the characters shown in the image.
POS SOFTWARE

 

Now about 2 million Australians shoppers use a "Buy now and Pay later" service. That is a lot of shoppers. Because it fills a need, the growth has been explosive.

This market is dominated by two big players Afterpay (who are the biggest) and Zip who between them have probably about 98% of the market and a number of smaller and often more specialised ones having the rest if you want to know more about this check out this report.

Here is a graph from the report.

The public is using these products, and there is every indication that this growth will continue. As what it offers a service where the public can have what it wants now and pay interest-free over time.

For our clients a non-integrated solution will be quite a bit of work and unnecessary as our point of sale software is integrated, they would want an integrated solution. Also what they are looking for is a low cost "Buy now, Payer service" as Lay-by is not a good alternative if a customer needs something immediately and as a possible alternative for lay-bys which has problems and costs of administration.

However, like everything, it has a cost, and if it is not the public, it is the merchant that is paying.

Now in our marketspace, three players are trying to break in Afterpay, Oxipay and Zip. I looked into all three, talked to merchants that were using them and here is my view.

Afterpay, we have an excellent relationship with the holding company touchnet works, but this did not help much as it appears that Afterpay team is not that interested in our marketspace. They did tell me that they had an integrated solution through Tyro, which our clients can use and are looking to expand it to other providers but no timetable. The other problem was costs, Afterpay appears to be the dearest 4 to 6% of the sale, which is a lot to my clients who often work on low margin items. Also if the sale is cancelled these fees are not recoverable by the merchant. So they are not going to get a low cost "Buy now, Payer service" here. Also, the repayment schedule is fixed, every two weeks 25% which often does not suit a typical lay-by customer. Generally, a lay-by customer wants a service where they pay something when they have some spare cash and wants the flexibility to decide when their instalments are done and what amounts to pay off. What we did like is that for the merchant, there is no requirement for no payment up front which in many cases this can help the sale move on. The interest-free/penalty period for the customer works out to 56 days. What we did like is that payment to the retailer was within 48 hours. What we did like was the marketing, Afterpay does lots of merchant marketing and that is a big plus.

Oxipay, the first big problem we felt here is that it is small. Regardless of what the retailer thinks if the public is not using it much so what is the point of pushing it? I think it will be an uphill battle for a merchant to sell it just for this reason. The other problem is that a client of ours using it felt the merchant fees were high about 4.5%, so they switched as much as they could to Zip. Also, they have all the same problem as Afterpay with lay-by in that the repayments schedule and amount were fixed, but here the customer is also required to pay 25% upfront which we felt was often a big issue. The interest-free/penalty fee is I believe only 42 days. The merchant repayment was slightly better in that it is the next day at 4 pm. We did not see much in the way of merchant marketing.

Zip, seems to get over most of these problems. The merchant fees are the lowest about 2 to 5%. The customer repayments can be made anytime the customer wants. The interest-free/penalty period can be up to 60 days, but the bonus here was that the customer only has to pay a nominal fee of $40/month if they are short of cash. The merchant repayment period was the best, the same day at 4 pm. What was great was that Zip does a lot of merchant marketing. I was told they sent over a million marketing emails to their clients for Mother's Day advertising product remember we are talking about half a million people using Zip credit.

Risk. All these companies advertise to the merchant that they are *NO* risk. What exactly does this will mean in practice, I am not sure. In case of fraud, in my experience here often it is *NO* risk to them but *ALL* risk to the merchant. However, it does appear that all of them will accept much of the risk.

There is of course if you are willing to go manual to apply to all of them as there is no cost to the merchant to get any or all of them however from what I can gather most merchants that have Zip and something else, tend to push Zip simply as it is cheaper.

Whatever service you pick of course has to fit into your business which will include your needs, your clients’ needs and your technology before choosing. If you go with Zip, we have a good relationship with them now, and at least our clients are not going with us in alone into this market. However, I do believe that a modern shop today should risk missing out on a sale because they do not offer "Buy now, pay later" method. It is damaging now and will get more damaging in the future. Of course, if you want you can do it alone and carry all the risk if your client runs out of money, at least with this option you do not pay any fees.

Whatever you do, you need to make sure that get some point-of-sale materials to display, for example, a sticker to put on your front window to let your clients know you have that service.

If you want to investigate Zip now, please click here.

 

 

 

POS SOFTWARE

The big trend in retail now, are the newer cards that allows a customer to buy and use a product immediately, and then pay for it later with no interest. This market is dominated by three main players Afterpay (which is by far the biggest), Zippay (which is the talk of town at the moment since Westpac put $40 million dollars into it) and Oxipay (which I know little about other then it is in Tasmania). Paypal is unknown whether it will enter this marketspace. As you can see from this graph, there is as much interest in Afterpay as Paypal in Australia now.

 

 

To give you a feel of the size of this market, Afterpay in the second quarter of 2016, had over 375,000 customers who spent $100m and to give you a feel of the growth of this market, that was more than double the $42m people spent with Afterpay in the previous quarter. Growth is expected, for example, overseas in Sweden such cards have about 60% of the market.

With our Point of Sale Software, you have the technology to get Afterpay.

The system works like this. A customer buys and gets an item immediately from a retailer paying with Afterpay. The retailer gets paid straight away minus a fee of about 4%. Then the customer pays Afterpay over an eight-week period with no interest. Zippay is slightly different in that a person has 30 days to pay with no interest, and if they wish, they can take longer to pay but with an interest rate which is a fraction that VISA charges.

Afterpay also runs promos for their merchants which have been very successful, The Afterpay Day on the 30 August, broke retail trade records with $15 million of sales with more than 70,000 orders were processed. See here for more details. {Link was removed}



If you want to know more let me know.