Microsoft today announced a partnership with Buy Now Pay Later (BNPL) provider Zip Co, launching its pilot in the Australian market.
Microsoft claims that the partnership is in response to changing habits for digital purchasing, with more than 35 per cent of Australian consumers using BNPL installment plans.
According to Michelle Casey, Digital Stores Lead at Microsoft ANZ, “Our latest collaboration with Zip is a vital extension of our commitment to provide even greater access to Australians, particularly the student market, so that they can shop with confidence without compromising innovation and performance.”
The Zip App will host a bespoke “single-use digital credit card” for Microsoft customers, offering a 12 months interest-free payments solution.
“This is a necessary step following a sharp increase in customer demand towards tailored payment options in the Australian market, more than any global counterpart,” says Casey.
Microsoft plans to extend its BNPL offering from online customers to retailers and small businesses later in the year, as well as launching BNPL in other markets.
According to Colin Baines, Director, Enterprise Sales at Zip Co, “Every day we are seeing that people are changing the way they pay, especially online. Zip believes there is great potential to grow our services in the Australian technology sector, and we are proud to be doing this with Microsoft.”
The deal with Microsoft comes hot on the heels of Zip’s recent announcement that it is joining Adobe’s Accelerate program to offer its services to merchants using Magento. Partnerships with global heavy hitters like Microsoft and Adobe signal Zip’s intention to be a dominant player in BNPL once the dust settles.
Zip Co, among other BNPL competitors such as Klarna, and unlike market darling Afterpay, promotes its use of credit checks to ensure responsible lending — despite BNPL being heavily criticised as an under-regulated industry.
Microsoft claims that the offering is designed to “empower Australians to do more with their money.”