Zip Co volumes surge as credit card 'demise' gains momentum
The buy-now-pay-later platform has reported record revenue of $71.7 million in the first quarter of FY21, up 88 per cent from a year earlier.
Quarterly transaction volumes surged to a record $943.1 million, up 96 per cent, while transaction numbers were up 13 per cent year on year.
Zip Co estimates annualised revenue of $3.8 billion, based on the latest figures, with 4.5 million customers.
Some of that growth can be attributed to its acquisition of US-based QuadPay which settled in early September. The deal has extended Zip's global footprint to include operations in Australia, New Zealand, the US, UK and South Africa.
CEO Larry Diamond said the US experienced significant growth with revenue and volumes up 50 per cent and 42 per cent respectively, quarter on quarter.
QuadPay in the US recorded $322.5m in transaction volume, $23.4 million in revenue and ended the quarter with 2.2 million customers.
"Locally, the product and merchant pipeline are extremely exciting, and we look forward to a number of announcements in the months ahead," says Diamond.
"The current quarter has begun solidly in all markets, which is seasonally the strongest as we run up to Prime Day, Black Friday, Cyber Monday, Christmas and Boxing Day.
"Customers are continuing to increase their online spend in response to COVID-19, supported by Zip's products that provide a better and fairer, digital alternative to the credit card.
"Data from the recent quarter continues to show the demise of the credit card model."
Zip points to figures showing Australian credit card balances slumped 24 per cent over the past year, while balances accruing interest fell 28 per cent.
Despite the solid numbers, Zip shares edged lower on the ASX this morning. The shares dipped about 2 per cent, weighed down by general concerns of increased competition creeping into the buy-now-pay-later sector.
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