How does Zip Money differ from Afterpay?

How much you can spend

Start by checking how much you may be able to spend and will need to repay against your budget and spending habits. 

• Afterpay may offer customers an initial purchase limit of $500.

• Zip Money may offer customers $1,000 - $5,000 limits on purchases. 

Your Afterpay transaction limit may increase if the information the provider collects about your spending and borrowing patterns suggests you have a higher spending capacity. Still, that original smaller amount may help you control spending. Zip Money may also allow you to borrow more after using the service for at least six months.

While Afterpay doesn’t necessarily inform users about their increased spending limits, it may soon need to issue ‘explicit instructions’ before increasing spending limits to ensure the product remains suitable for respective users.

Repayment structures

As for repayments, you have to repay your Afterpay debt in four instalments spaced two weeks apart, starting from a down payment of 25% of the amount you spend, but you may not need to pay any interest on the amount.  

Zip Money offers flexible repayments, meaning that you can choose your repayment schedule and pay a suitable monthly amount as long as it exceeds the minimum specified amount, usually $40. 

Also, you likely won’t incur any interest on the amount borrowed if you repay it within the interest-free period. This can vary between three and 36 months, depending on where you spend your money.  If you still have an outstanding balance after the interest-free period, you’ll have to pay interest at the standard annual rate.

How you can repay

Afterpay allows you to repay your debt using a credit or debit card. This means that if you were to link your credit card to a purchase and did not meet your regular payment instalments, you could be charged interest for your purchase via your card issuer. 

In contrast, Zip Money debts cannot be paid using a credit card. You can use a debit card or make the payment from your bank account.

See the table below for a more detailed comparison of Afterpay and Zip Money features.

If you’re eligible to use Afterpay, you’ll need to create an account using their mobile app, set up an Afterpay Card, and link it to your digital wallet to pay for in-store purchases. If you’re shopping online with a store that accepts Afterpay, you may not need to create an account first. 

Note that even if you qualify to use Afterpay, your purchase may only be approved if you meet certain criteria. This could include the balance available on your Afterpay Card, the value of your purchase, and the number of Afterpay debts you still owe. 

You can use Zip Money to pay for purchases at physical stores and online. But the payment method differs from Afterpay in that the single-use Shop Everywhere card linked to your Zip Money account can only be used to pay for shopping at stores that accept Visa payments. 

When shopping at physical stores, making payments using Zip Money requires downloading the app, setting up your account, generating a barcode and getting it scanned at the store’s checkout counter.  

You may find either Afterpay or Zip Money convenient depending on factors like what you’re shopping for and the store you plan to buy from. Still, you should remember that both are effectively loans you need to repay, preferably without incurring interest.

Taking on too many debts, even from BNPL service providers, and missing repayments can affect your credit score and make it more difficult for you to access other kinds of credit later.