Zip is one of the largest buy now pay later (BNPL) providers in Australia, and customers will be able to sign up to a single-use digital credit card tailored to Microsoft purchases through the Zip app. 

Through the store, customers can purchase not only Office products, but Surface laptops and tablets, and Xbox consoles and games. 

The initial roll-out is for customers, with a plan to roll it out to retailers and small businesses "later this year". 

Microsoft ANZ digital stores lead Michelle Casey says this is a "necessary step". 

"We are excited to venture into the BNPL ecosystem with an innovative fintech partner who shares the same vision of making technology a more available resource ... following a sharp increase in customer demand towards tailored payment options in the Australian market, more than any global counterpart," she said.

Zip director of enterprise sales Colin Baines said the BNPL provider is "extremely excited" with the partnership.

"Every day we are seeing that people are changing the way they pay, especially online," he said.

"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 state of BNPL

Zip's announcement adds to the list of BNPL providers branching out from the traditional retail sector.

Last year, Afterpay teamed up with Webjet to offer BNPL on flights; a new BNPL launched to offer the service for rental bond payments; and one provider even allows fragmented home buyers to BNPL their purchase. 

However, big ticket items put on instalment plans have been a worry for consumer groups such as Financial Counselling Australia (FCA).

"Because BNPL providers are not regulated, and thus not licensed under the Credit Act, they don’t have to check if you can afford the credit, don't have legal obligations to offer hardship arrangements and don’t have to join the dispute resolution scheme - the Australian Financial Complaints Authority," FCA CEO Fiona Guthrie told in 2020.

There is talk of BNPL providers being credit regulated, however a recent Senate Inquiry found self-regulation is sufficient.

Zip's announcement today also cited a statistic that said "over 35% of consumers [are] now using payment plans".

However, payments expert Grant Halverson told in April that other payments still dwarf BNPL, which makes up only 1% of the payments market.

Photo by Andrew M on Unsplash