Zip ventures into cryptocurrencies to fuel expansion

The news: Australia-based buy now, pay later (BNPL) provider Zip wants to let merchants accept Bitcoin payments next year and also plans to launch a cryptocurrency trading feature, per CoinTelegraph.

Why it’s worth watching: BNPL users are 67% more likely to trade cryptos than non-users, according to Zip’s internal research—but Zip isn’t the only BNPL provider that sees opportunities in the space.

In a submission to Parliament’s Select Committee on Australia as a Technology and Financial Centre, Afterpay said merchants could “benefit considerably” from crypto transactions because they can reduce fees set by card networks. The company also hinted at ambitions to introduce crypto-related solutions and called for more regulation in the space.

Recent moves suggest retail investing and payments are becoming increasingly intertwined, which may be what’s behind Zip’s crypto trading plans.

• PayPal is reportedly looking into launching a stock trading platform—it recently hired brokerage industry expert Rich Hagen.
• And Robinhood is preparing to launch a feature that lets users get their paychecks directly deposited up to two days in advance.

The opportunity: Many BNPL providers have launched banking-related solutions—Klarna and Affirm each introduced their own bank account offerings, and Afterpay recently launched a money management tool. But enabling crypto purchases and trading is a somewhat unconventional move that can help Zip stand out.

Strong consumer appetite for crypto payments might make Zip a more attractive option for merchants—a Mastercard study found that 40% of global consumers plan to use cryptocurrencies for payments this year, for instance. And the crypto trading feature might help keep customers closely tied to Zip’s brand, which could make them more likely to spend through the provider.

The bigger picture: Zip’s announcement comes on the heels of its acquisition of South Africa-based BNPL startup Payflex. Like its crypto ambitions, moving Africa is not something other major BNPL providers have done—and both represent the company’s hunt for growth opportunities through unique pathways.

Related content: To get a deeper understanding of opportunities in crypto payments and why Zip might be pushing into the space, check out the Blockchain in Payments report.