<h1>Zip</h1>
<p>Accept interest-free installment payments through Stripe's integrated Buy Now, Pay Later solution. Zip lets customers split purchases into four payments over six weeks, helping merchants increase conversion rates and reach budget-conscious consumers.</p>
<h2>What is Zip?</h2><p>Zip is a popular buy now, pay later payment method that lets customers split their purchases into four interest-free payments spread over six weeks. Customers make an initial payment at checkout and then pay the remaining balance in three equal biweekly installments. Zip handles the entire repayment process with customers, including sending reminders and processing payments, so merchants don't need to manage installment collections.</p><p>Offering Zip as a payment option can significantly increase checkout conversion rates by giving customers more flexibility to complete purchases. Many customers abandon shopping carts when they realize they can't afford to pay the full amount upfront, but Zip's installment option allows them to make the purchase without paying everything at once. By integrating Zip alongside other payment methods, merchants can optimize their checkout experience and reduce cart abandonment—a key focus of our <a href="/services/web-development/">web development services</a>.</p>
<h3>How Zip Works for Customers</h3><p>Customers first create a Zip account and link a payment method, typically a debit or credit card. During checkout on a merchant's website, they select Zip as their payment option. Zip performs a quick eligibility check using a soft credit inquiry that doesn't impact the customer's credit score. If approved, the customer sees their payment breakdown: 25% due today and three more 25% payments every two weeks thereafter.</p><p>The first payment is charged immediately at the time of purchase, with subsequent payments automatically scheduled based on the purchase date. Zip sends email and push notifications to remind customers before each payment is due, reducing missed payments and the associated fees.</p>
Payment Structure
4 payments over 6 weeks
Upfront Payment
25% at checkout
Installment Interval
Every 2 weeks
Interest
0%
Credit Check
Soft inquiry only
Available Regions
US, Australia
<h3>Supported Regions and Currencies</h3><p>Zip is currently available for merchants and customers in the United States and Australia, with each country having its own Zip service. The US version of Zip supports transactions in US dollars (USD), while the Australian version supports Australian dollars (AUD). Merchants operating in these regions can enable Zip through their Stripe dashboard to start accepting payments from local customers.</p><p>For merchants with international customers, Zip's availability depends on the customer's location. A customer in the United States can use Zip for purchases from US merchants, but Zip cannot be used for cross-border transactions where the customer and merchant are in different countries.</p>
<h2>Integration with Stripe</h2><p>Merchants using Stripe can enable Zip directly from their Stripe dashboard without any coding or technical implementation. This no-code approach means businesses can start accepting Zip payments within minutes by simply activating the payment method in their account settings. The integration is handled entirely by Stripe, making it one of the easiest BNPL options to implement. For complex implementations requiring custom checkout flows, our <a href="/services/ai-automation/">AI automation specialists</a> can help design automated payment workflows that leverage Zip and other payment methods.</p>
<h3>Enabling Zip in Your Stripe Dashboard</h3><p>To enable Zip, log into your Stripe dashboard and navigate to the Payment Methods section. Find Zip in the list of available payment methods and follow the prompts to activate it. You may need to agree to Zip's terms of service and provide some basic business information. Once activated, Zip will automatically appear as a payment option for eligible transactions based on your business and product type.</p>
<h3>Automatic Activation for Eligible Merchants</h3><p>Many merchants on Stripe find that Zip becomes available automatically based on their business type, transaction volume, and geographic location. Stripe evaluates merchants for Zip eligibility and enables the payment method when appropriate. If Zip is not yet available in your Stripe dashboard, you can request activation by contacting Stripe support or your account manager.</p>
<h3>API Integration for Custom Implementations</h3><p>For merchants with custom checkout implementations, Zip integrates seamlessly through the standard Stripe API. When creating a <a href="/resources/docs/platform-docs/stripe/stripe-payment_intents/">PaymentIntent</a>, include Zip in the list of allowed payment methods. The Stripe Payment Element automatically displays Zip as an option for eligible transactions, handling all the UI and customer interaction logic.</p>
<h2>Payment Flow and Customer Experience</h2>
<h3>Customer Checkout Journey</h3><p>When a customer selects Zip at checkout, they are redirected to complete their purchase through Zip's secure checkout flow. This redirection handles customer authentication, payment method verification, and installment agreement acceptance. The customer creates or logs into their Zip account, reviews their payment schedule, and confirms the purchase.</p><p>After selecting Zip, customers see a summary of their payment plan: the total purchase amount, the four payment dates, and the amount due at each payment. The entire checkout process typically takes less than a minute for returning Zip customers who already have an account set up.</p>
Customer selects Zip at checkout
<h3>Payment Schedule and Timing</h3><p>Zip payments follow a consistent schedule: customers pay 25% of the purchase total at checkout, then 25% at two weeks, 25% at four weeks, and the final 25% at six weeks from the purchase date. This creates an eight-week payment cycle from initial purchase to final payment. Each payment is automatically charged to the payment method the customer linked to their Zip account.</p>
<h3>Refunds and Order Changes</h3><p>When a customer returns an item or cancels an order paid with Zip, the refund process is handled through Stripe like any other payment method. The merchant initiates the refund in their Stripe dashboard, and the refund is processed to the customer's Zip account. Zip then adjusts the customer's payment schedule accordingly.</p>
<h2>Benefits for Merchants</h2>
Increased Conversion
Studies show BNPL options like Zip can increase checkout conversion rates by 20%+ for merchants who prominently feature the payment method.
Higher Average Order Value
Merchants accepting Zip typically see AOV increases of 15%+ as customers feel comfortable adding more items when they can spread payments.
New Customer Segments
Zip opens your business to customers who prefer installment payments over credit cards, including younger, budget-conscious consumers.
<h2>Implementation Best Practices</h2>
<h3>Displaying Zip Throughout the Purchase Journey</h3><p>The most effective implementations of Zip show customers the payment option early and often throughout their shopping journey. Start by displaying Zip availability on product pages, showing the per-payment amount alongside the total price. For example: "$99.99" with "Pay in 4 interest-free payments of $25.00" helps customers immediately understand the affordability of the purchase. Optimizing your site structure and content for these payment messaging elements is a core component of our <a href="/services/seo-services/">SEO services</a>.</p>
<h3>Setting Transaction Limits</h3><p>Configure minimum and maximum transaction amounts for Zip based on your product catalog and business goals. For most merchants, minimum Zip transactions between $30 and $50 work well, excluding shipping and taxes. Maximum limits typically range from $1,000 to $2,500 depending on your average order values and risk tolerance.</p>
<h2>Fees and Settlement</h2>
<h3>Transaction Fees</h3><p>Merchants pay a transaction fee for each Zip payment processed, typically a percentage of the transaction amount plus a small fixed fee. These fees are generally higher than standard credit card processing fees due to the additional services Zip provides, including customer acquisition, payment processing, and risk management. When evaluating Zip's financial impact, consider the total value including conversion rate improvements and higher average order values.</p>
<h3>Settlement and Payouts</h3><p>Merchants receive the full transaction amount upfront when a Zip payment is completed, just as they would with a standard credit card payment. Stripe settles the funds to your bank account according to your normal payout schedule. The full purchase amount is settled regardless of how many installments remain for the customer.</p>
<h2>Frequently Asked Questions</h2>
<h3>What happens if a customer misses a payment?</h3><p>When a customer misses a Zip payment, Zip handles the collection process directly with the customer. Zip sends reminders and attempts to process the payment again. From the merchant's perspective, completed Zip transactions are treated like any other payment. The merchant has already received the full sale amount through Stripe settlement. Zip absorbs the risk of customer non-payment.</p>
<h3>Can customers use Zip for international purchases?</h3><p>Zip is currently only available for purchases where both the merchant and customer are located in the same supported region—either the United States or Australia. A US customer cannot use Zip to purchase from an Australian merchant, and vice versa. Each country's Zip service operates independently with local currency support.</p>
<h3>Does Zip impact customer credit scores?</h3><p>Zip uses soft credit checks when evaluating customers for payment eligibility, which do not impact credit scores. This allows customers to check their Zip eligibility without worrying about affecting their credit history. Zip may report payment history to credit bureaus, which could impact credit scores for customers who consistently miss payments.</p>
<h2>Related Resources</h2>