Afterpay vs Zip for US merchants

Afterpay

B

Afterpay is the buy-now-pay-later network founded in Sydney in October 2014 by Nick Molnar and Anthony Eisen, and owned since January 2022 by Block, Inc. — the deal was announced in August 2021 at a headline US$29 billion and completed on far less, reported at roughly US$14 billion in Class A shares, because Block's own share price had fallen in the interim. For a merchant, the proposition is straightforward: offer shoppers four interest-free instalments over six weeks, or a monthly plan over six or twelve months, get paid up front rather than waiting for the customer to finish paying, and let Afterpay carry the fraud and non-payment risk. In exchange the merchant pays a commission Afterpay does not publish — third-party reviewers consistently report a range around 4% to 6% plus roughly $0.30 per transaction, several times the cost of taking the same sale on a card. Afterpay's own merchant marketing claims a 58% increase in average order value among accepting merchants and $8.6 billion of incremental US sales delivered over the preceding twelve months. Under Block, the product has increasingly become a Cash App feature rather than a standalone checkout button: Afterpay Post-Purchase and, from 2026, Afterpay Pre-Purchase let Cash App Card holders convert everyday card spend into instalments at any merchant, whether or not that merchant has ever signed an Afterpay agreement.

Zip

B

Zip is the US buy-now-pay-later network formerly known as Quadpay, owned by the ASX-listed Zip Co Limited. Zip Co was founded in Sydney in 2013 by Larry Diamond and Peter Gray and listed on the Australian Securities Exchange in 2015; the American business it now trades under is Quadpay, a New York company incorporated in August 2017 and bought by Zip in a deal announced in June 2020, approved by shareholders on 31 August 2020 and completed that September. For a merchant the offer is the familiar BNPL trade: let shoppers split a purchase into four instalments over six weeks, get paid up front, and hand the credit and non-payment risk to Zip. What separates Zip from the rest of the category is that it prints a price, and a settlement window to go with it. Its Standard plan is published on its own site at 5.9% plus 30 cents per transaction with no monthly or annual fee, where Afterpay, Klarna and most of the field quote nothing at all and negotiate every deal in private. It also publishes what most of the category will not: that it settles the merchant in full, minus its fees, within two to three business days, and where chargeback liability sits. That 5.9% is nonetheless the highest published headline rate in mainstream BNPL, and Zip's own FAQ confirms it is a floor rather than a ceiling. The parent is now solidly profitable — FY26, the year to 30 June 2026, brought A$16.7 billion of transaction volume, A$1.336 billion of revenue and A$116.4 million of statutory profit, with the US arm growing revenue more than 42% in local currency — but it has also exited Singapore, the United Kingdom and, in August 2026, New Zealand, and in May 2026 lost a unanimous High Court trade mark case in its home market — a loss it settled eight days later by acquiring the disputed mark from Firstmac, avoiding the rebrand the judgment otherwise required and taking on no further damages liability.