Afterpay vs. Zip Pay

Updated 7 Oct 2020

Fashion store
  • We compare two of Australia's biggest buy now pay later services and their offering for Kiwis.
  • Get a detailed comparison of costs, spending limits, repayments and more.
  • Find out which service suits how you shop.

The popularity of buy now pay later (BNPL) services for shopping as an alternative to traditional bank and credit cards continues to grow unabated. Here in New Zealand, two services from across the Tasman — Afterpay and Zip Pay — are vying for attention. Read on to discover which one will serve your needs best.

How Afterpay works

Originating in Australia in 2015, Afterpay has now become widely used in New Zealand too! Afterpay is currently partnered up with over 10,000 big-name retailers including Nike, K-Mart, and Target. As New Zealand’s most prevalent buy now pay later (BNPL) service, shoppers can receive their goods immediately and repay the remaining cost of the item over four fortnightly instalments.

Afterpay doesn’t have a rigorous sign-up process. All applicants need to present is a valid ID reflecting legal age and an active debit or credit card. They must also be a New Zealand citizen or permanent resident. After approval, users can shop with the app or on the website immediately. A barcode will reflect the initially available spend.

Whether buying in-store or online, Afterpay users must settle the first payment up-front, which is 25% of the total purchase price. They have to repay the remaining instalments manually or automatically. Afterpay won’t take payments via bank transfer, prepaid card, or BPay.

How Zip Pay works

Afterpay’s biggest competitor is perhaps Zip Pay, a BNPL service that caters to over 1.9 million users. Similar to other services, Zip Pay provides users with a line of credit and a flexible repayment plan.

Eligibility for a Zip Pay account is more restrictive than Afterpay’s requirements. Beyond being of legal age and a New Zealand citizen or permanent resident, users must also have a reasonable credit history and provide a registered Facebook, PayPal, or LinkedIn account. If eligible for an account, applicants must also present financial information such as bank statements, which will also determine initial spending limits.

With Zip Pay, users can shop with merchants online or in-store. They can also purchase gift cards and pay select household bills such as utilities, water, internet, and phone plans, given that the service provider has an existing partnership with Zip Pay.

You can use a credit card that earns rewards points to fund your Afterpay or Zip Pay account.

Feature comparison

Repayment frequency

  • Afterpay: Afterpay requires that users repay purchases in fixed instalments – four payments every two weeks. Each repayment will equal 25% of the total purchase price. Miss a payment, and incur a late fee plus an additional charge for skipping deadlines over seven days.
  • Zip Pay: Zip Pay offers more flexible repayment options compared to Afterpay. Users can choose to repay an item weekly, fortnightly, or monthly depending on the purchase price and retailer.

Borrowing limit

  • Afterpay: Generally, Afterpay won’t approve single transactions over $1,500 unless you apply for an alternative payment plan. Additionally, users can only hold an outstanding account limit of $2,000. How much you can spend initially will depend on a pre-authorisation check of your debit or credit card. Your borrowing cap will eventually increase if you consistently pay your plans on time.
  • Zip Pay: Depending on the financial documentation you provide upon application, Zip Pay will assign your account a credit limit of $350, $500, or $1,000. Over time, you can increase this limit by making repayments and avoiding arrears.

You can also request to spend above your limit. However, this might require additional financial information and comes with a stricter approval process.

Credit check

  • Afterpay: Afterpay will only run a credit check on your account to approve higher-cost purchases or if a partner retailer requires it. Otherwise, it won’t subject new applicants to one, unless they’re looking to increase their spending cap immediately.
  • Zip Pay: Zip Pay requires that users undergo a credit check upon application, and this rating will determine the credit limit you’re eligible for.

Online & offline use

  • Afterpay: Afterpay users can shop with over 10,000 retailers online or offline. You can browse available shops on the Shop Directory and select Afterpay as a checkout option online or scan your barcode at the register. Approval with Afterpay will rely on your available credit, how long you’ve been using the service, your repayment history, and the number of active plans you’re currently repaying.
  • Zip Pay: Zip Pay and Afterpay’s checkout options are virtually identical. However, Zip Pay requires the additional step of inputting a code into your app or browser, which you’ll receive via email or SMS, to verify the purchase.

Cost comparison

Account fee

  • Afterpay: There are no fees required to maintain an Afterpay account.
  • Zip Pay: While Zip Pay doesn’t charge an annual fee, users will have to spend at least $40 a month to keep their account active. After the sixty-day fee-free period, users will also have to pay $6 on top of their outstanding balance. To avoid the fee, users must repay all due charges before the end of the month.

Interest rate

  • Afterpay: All purchases made through Afterpay are interest-free.
  • Zip Pay: Like most BNPL providers, Zip Pay doesn’t charge an interest fee. However, the $6 monthly fee can set you back more than you’d anticipate. You can avoid this fee by making prompt payments or settling debts ahead of their deadline.

Late fee

  • Afterpay: On purchases within $40, you can accumulate a total late charge of $10. Above $40, you can also incur a $7 fee for deadlines missed over seven days, which can mount up to $68 if you ignore all repayment dates on a single transaction.
  • Zip Pay: Zip Pay’s late fees aren’t nearly as expensive as Afterpay’s. For every payment you miss over 21 days, you’ll have to pay a fine of $5. This late charge doesn’t apply to purchases made during the sixty-day fee-free period.

Pros & cons



  • Activating an account doesn’t take more than a few minutes – new users can shop immediately afterwards.
  • Frequent shoppers can access over 10,000 stores, whether at home or visiting the shopping centre.
  • Integration within online portals and in-store structures is seamless.
  • Users can shop without interest.


  • Late fees are among the highest of all the BNPL services.
  • Not every order will get approved, even with an available balance.
  • It can be difficult to recover your account privileges if you miss too many due dates.

Zip Pay


  • Beyond the typical shopping experience, users can also pay household bills through the Zip Pay app.
  • Payment plans are more flexible than most BNPL services.
  • Under certain circumstances, users can repay purchases above the minimum amount, giving you more control over how you pay off your plan.


  • Shoppers have to spend at least $40 a month to keep their account active, which can encourage unnecessary spending.
  • There is a $6 monthly service fee if you don’t settle your outstanding charges by the end of the payment cycle.
  • The fee-free period only lasts sixty days.
  • To be eligible for an account, applicants have to present financial information and undergo a credit check.

Which one is better?

There is no denying that Afterpay and Zip Pay have the upper hand compared to other BNPL services. Neither charges any interest and can make expensive purchases more available to the casual shopper.

Determining which of the two better suits your needs will depend on how much debt you’re willing to take on. Because Zip Pay is essentially a line of credit, you can get in as much trouble as you would with a credit card. If you’re after more flexible repayment plans, however, it may be the better option. For bills settlement, Zip Pay is the clear winner.

However, Afterpay is just as superior in other ways. Unlike Zip Pay, Afterpay’s terms are truly interest-free. Though repayment options are more restrictive, you’re less likely to purchase more than you can afford. Plus, you can shop with a broader catalogue of retail partners. The downside is that Afterpay’s late fees can set you back tremendously.

When picking a service, take into account your spending habits, preferences, and financial health. Never bite off more than you can chew.

Afterpay and Zip Pay's competitors

The public appetite for interest-free instalment plan has been met with a number of buy now pay later services. Apart from Afterpay and Zip Pay, alternatives include Genoapay, Humm, and New Zealand's home-grown Laybuy. Compare them all on Finty so you can make an informed decision.