Zilch Partners with Mastercard, Using Innovation to Remove Inefficiency in BNPL

The current climate has made it hard for consumers to feel confident in spending. In many cases, one of the biggest hurdles for many consumers is having the immediate cash flow to fund purchases. With a buy-now-pay-later (BNPL) approach, Zilch offers a card that spreads out payments without charging fees. Unlike a credit card, the BNPL card schedules four payments over the course of six weeks. It’s an easy way to utilize credit that treats your bank account much more like a debit card. The balance is limited, keeping consumers from accidentally overspending. However, the revolutionary approach to BNPL provides freedom unavailable with cash and checking accounts.

Rather than trying to base spending on merit and return (like a loan lender) or willingness to overspend (like credit card companies), Zilch focuses on freeing users to shuffle their funds and manage their finances however they see fit. This puts the power in the hands of the customer and has gotten a lot of people really excited about their options, including me.

This is a revolutionary way to look at credit and has flipped the BNPL system on its head to offer something convenient for its customers. There are a lot of reasons shoppers may need a break with payment options—Zilch covers many. Whether the shopper is low on funds or hits an unexpected expense, a tool like Zilch makes it possible to have more control over your own finances. During a downturned market, this system couldn’t have come at a better time for consumers and retailers alike.

The system brings together both parties as it helps bridge the gap often made impossible with financial barriers. Rather than face the steep fines and fees often associated with credit cards, users of all levels can benefit from the Zilch BNPL tool. Moving past the monetary goodwill, the company has streamlined the process as it bypasses the traditional BNPL barriers.

Zilch Partners with Mastercard

One of the biggest questions was how many retailers would partner with Zilch. In a disruptive way, Zilch chose to work with the cardholder rather than the retailer to provide much wider access that spans thousands of retailers.

Zilch has partnered with Mastercard to deliver the unique payment system with a convenient, green card. Customers are able to checkout at any retailer that uses Mastercard if they are using the Zilch Virtual Mastercard. Jason Lane, EVP, Market Development Europe at Mastercard stated:

“Zilch is a flourishing fintech which aims to help shoppers manage their cashflows in a way that fits their timeline. At Mastercard, we continue to be the partner of choice for fintechs across Europe as we strive to help scale innovative payment solutions that improve people’s lives.”

How Does Zilch Work?

The founders of Zilch saw a market that took advantage of overspending or shut out those without accumulated funds and decided that there was an opportunity for change (but without disruption). With the patent-pending model of Zilch, consumers can avoid high interest rates and late fees, without foregoing the purchases they need or want to make. The system is designed to protect users against over-borrowing by using AI to calculate affordability for each shopper.

With the established lending max, a shopper can pay just 25% down and spread out the rest over three easy payments. It makes large purchases, like high fashion, technology or furniture, easier to afford. There are no hidden catches. And if users want to spend more than their max limit, they can “boost” their Zilch amount by paying the overage directly from their connected debit card.

Unlike layaway, the shopper gets the item before they finish payments. Zilch has a very gentle approach to missed payments —they simply try again a bit later. However, if you don’t pay, your credit line is halted until you pay off the debts. They offer a support team for customers that run into issues with financial difficulty. Even with payment issues, Zilch doesn’t take any late fees or interest. Instead, the Zilch website notes, “We don't charge late fees; we were built to empower your wallet, not take from it.”

The signup process is easy and the approved shopper gets immediate access to the virtual card. All shoppers have to do is sign up with a debit card, postal address, email address and mobile phone number.

This freedom can help make a purchase possible without a huge hassle, additional cost or long waiting period. It puts the timeline into the hands of the consumer so they can pay on the schedule that works best for them. This allows a consumer to juggle other bills and paydays without a major inconvenience.

During COVID, this has been a saving grace for many.

Few of Zilch’s customers default. Most make use of the BNPL option as a cash flow management tool. The product is designed to only fund affordable and smaller discretionary purchases in an effort to help users stay away from overspending.

Stunning Initial Growth from BNPL Startup Zilch

The company started a BETA product launch in 2019 and has followed a drastic growth arc since. The Gen Z and Millennial shoppers in particular find the approach refreshing and exciting. They aren’t afraid to dip their toes into new technology. These younger generations of adults are more informed about their financial decisions than any generation before them and realize the possibilities and the value of the partnerships involved. They are swarming to jump on the opportunity as soon as Zilch has the opening. There is currently a waiting list of those interested in joining Zilch. Interested applicants have to pass a soft credit check to help establish a spending limit through the AI tech.

A recent funding round showed the belief others have in the fintech over-the-top BNPL company. The funding round brought in a successful $11 million to help grow the company to new heights. Zilch has announced plans to increase the rollout for other payment options (watch this space) and the ever-growing waiting list.

Over 24,000 new shoppers are signing up with Zilch every month. CEO and serial entrepreneur Philip Belamant, along with his co-founding team is responsible for previous businesses that landed on the Forbes’s Top 100 Companies lists and the Nasdaq. Their know-how runs deep, and their vision is impressive.

About the Zilch CEO and Chairman

Co-Founder and CEO Philip Belamant has created other fintech enterprises, including the first Cash-to-Mastercard system for UBER in South Africa. Co-Founder and Chairman Serge Belamant is a computer scientist and entrepreneur that is well-known as a blockchain technology founder. Serge used smart-card and advanced encryption technology to create the first electronic purse. He also engineered the third-largest ATM system—the SSASWITCH (South African ATM Switching and Settlement System).

With a solid background in cutting-edge tech, startup companies and the finance industry, the founders realized the need to provide penalty-free systems that encourage flexibility and responsible spending. Founder and CEO Philip Belamant noted:

“Our unique over-the-top approach to BNPL has been built out of our strong knowledge for installment cards in developing economies such as South Africa and South America amongst others. We combine the benefits of installment and card products to offer the best way for our customers to pay overtime, anywhere. We believe that this generation should be able to responsibly have what they want when they want without being financially penalized for the privilege.”

Supporting the General Public and Consumers Everywhere

Rather than make money through fees paid by customers, the revolutionary BNPL approach makes money from partnerships with the retailers. One of the key focuses for the company is in helping consumers gain control of their money—not give it away. This is why Zilch customers celebrate it’s growth.

During a volatile market, the company feels responsible to help customers and not make their financial burdens heavier.

The company continues to grow at a strong and stable rate. The green-focused company is currently working on their Apple Pay and Samsung Pay solution that will allow shoppers to use their digital cards in-store and not just online. They have worked hard to grow their retail list to include over 5,000 major online retailers, including Amazon, GAME, iTunes, Sports Direct, Adidas, Nike, UGG, ASOS and eBay.

Zilch is redefining the payments industry and BNPL market. The company is set apart with the approach that doesn’t require integrations. Accessibility is continual and instant. With open banking, Zilch is able to give affordability rates in real-time with the use of artificial intelligence. To learn more about Zilch’s BNPL solutions visit: https://www.payzilch.com/

This article does not necessarily reflect the opinions of the editors or management of EconoTimes