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  • Writer's pictureDonnelle Brooks

Afterpay vs Zip Pay: A Review

Updated: Jul 26, 2023

So we've talked a bit previously about different Buy Now Pay Later services and how they stack up. We decided to make it simple, we're going to do a direct comparison between some of the most popular companies. In this article, we pit Afterpay vs Zip Pay to see which one comes out on top.

First, lets talk a little about each service, then do a quick side by side comparison.


Afterpay is the top Buy Now Pay Later company in Australia, and the world for that matter. The premise is simple: you purchase something on your Afterpay account and pay it off in 4 instalments. It's similar to Lay By, except you get to take it home with you right away.

For a more in-depth look at Afterpay, check out our article here.

Zip Pay

Zip Pay is a little bit different to Afterpay. Rather than paying off each purchase in instalments, your purchases get added to your account and you are presented with a balance at the end of each month. You have until the end of the following month to pay it off, or you pay a $6 fee. In this way it is more like a credit card than an instalment purchase platform.

For a more in depth review of Zip Pay, head to our article here.

What's the difference?

There are a few differences in the way Afterpay operates vs the way Zip Pay operates. They have difference fee structure and payment options. The one thing they have in common is the ease of use and the app based account management. Let's break down each of these elements.


The main difference between the two is how they make their money. This graph shows what percentage each service makes from different fees.

Merchant Fees

The pink column shows merchant fees. Merchant fees are paid by the retailer to Afterpay and Zip Pay every time you make a purchase at a store. For Afterpay, it is up to 4% of the purchase price. So if you buy something for $100, Afterpay makes $4. As you can see, Afterpay charges much more merchant fees, meaning they pass less fees onto the consumer.

Consumer Fees

The yellow bar represents other consumer fees. Consumer fees include things like establishment fees and account keeping fees. As you can see, Afterpay's are so small they don't even show. They make roughly 1% of their revenue this way. Zip Pay makes more than half their revenue from consumer fees. This is because they charge a $6 per month account keeping fee on outstanding balances and at time will charge a $25 establishment fee.

Late Fees

The blue bar represents late fees. As Zip Pay charge an "account keeping fee" they don't make as much money from late fees. It also has to do with how their payment structure is set up. The minimum monthly repayment is $40, which is quite low, so people are less likely to miss payments. Afterpay however charge instalments, which are easy to miss if the initial purchase price was large or if you have many purchases being paid off at once. We'll discuss their payment structures in more detail below.

how does afterpay make money compared to zip pay
Afterpay revenue vs Zip Pay revenue

Payment Structure

This is the biggest difference between the two services. Zip Pay operates very similar to a credit card. You add your purchases to your account and make a minimum repayment each month. Fees are only charged if you haven't paid your balance off the month after you receive your statement.

Afterpay however, breaks their payments into 4 fortnightly instalments for each individual purchase. If you buy something for $100, you make 4x$25 dollar instalments over the next 2 months. This can get tricky to keep track of if you have 10 purchases you are currently paying off. This is why they end up making so much money in late payment fees.

In this way, Zip Pay is simpler, as you only have to remember to make one monthly payment. In a battle between Afterpay vs Zip Pay, the latter comes out on top in terms of simplicity.

Upfront Payment

Often, Afterpay will require you to pay a portion of your purchase up front, whereas Zip Pay does not.

Which is easier to get approved for?

Afterpay does not as a rule conduct credit checks. To get approved for an Afterpay account, you just have to have a valid debit or credit card to link to your account. You will be approved for a small amount to start with, and as you use the account and prove yourself to be a good payer, your credit limit will increase.

Zip Pay however, conduct credit checks and will make sure you are creditworthy before you get approved for an account.

So which is easier to get approved for? That's harder to answer. Whilst it is easier to open an Afterpay account, each purchase is approved on a case by case basis. Some users have reported being declined for no apparent reason at the time of purchase. This can be frustrating and embarrassing. So whilst Zip Pay are more stringent when opening an account, once it is open it is easier to use.

Which has a higher limit?

Zip Pay has an initial credit limit of $350 - $1000, with an option to extend to $1500. They also have Zip Money, with a credit limit of up to $5000.

When you apply for an Afterpay account you are provided with an "estimated spend limit", which is usually about $500. This will increase the more you use your account. Their maximum outstanding limit is $2000, which is reserved for customers who have demonstrated a strong repayment history.

Afterpay vs Zip Pay: Afterpay wins out on this one, if you ignore Zip Money, which is technically a different product

Which is accepted in more places?

In this regard, Zip Pay and Afterpay are pretty equal. They are both accepted at most major retailers. Its in their best interest to offer you as many payment options as possible. After all, they want you to spend your money with them. Even most smaller online retailers accept both. I'd say if you are trying to decided between the two, don't let this be your defining factor.

girl weighing up a muffin and an apple
Weigh up your options before deciding between Zip pay vs Afterpay

Which is better?

Afterpay vs Zip Pay: which one is better? This all depends on what you are looking for. So I am going to sit on the proverbial fence and give two answers to this question.

Zip Pay is better if you want to have more control over your repayments. Because you are paying monthly rather than automatically scheduled instalments, it give you more control and won't attempt direct debits when your account is empty. If you plan to pay your balance off each month to avoid fees, I would go with this option. I would also suggest Zip Pay if you plan to make many small purchases rather than large ones.

Afterpay is better as long as you have money in your account when the repayments are scheduled. It is better for bigger purchases rather than multiple small ones. As long as you can manage repayments well enough to avoid late payment fees, Afterpay is an ok option. I would recommend Afterpay to pay off larger purchases.

The Bottom Line

I feel like I say this a lot, but at the end of the day, it is better to just use your own money. If you want to get started with a savings account, and ditch Afterpay for good, have a look at this article about how to start saving money. Good money management is the key to a stress free life. You can have your cake and eat it too.

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