Klarna rival Zilch valued at half a billion after funding round

A London-based buy now, pay later startup, Zilch, has been valued at $500 million after a round of funding after the Klarna rival raised $80 million from investors.

Zilch is currently seeing around 4,000 sign ups a day on its app and has more than 500,000 users.

The payment provider differs from its rivals by bypassing the need for implementing anything into a website’s checkout process and makes deals directly with the consumers.

The company has a deal with banking giant Mastercard and created its own payment card which is used by customers when they checkout with the option of paying in interest free instalments or as you would with a normal credit card.

Zilch charges the retailer the initial fee and the company’s model relies on the idea that retailers are paying for the convenience for their customers.

READ MORE: “Buy Now, Pay Later” firms to be hit with FCA regulation amid growing debt fears

The buy now, pay later model has gained popularity recently with Klarna and Clearpay being at the forefront and has been a big winner in ecommerce over the last 12 months.

The process works by offering the customer the option to pay for items in interest free instalments when checking out online.

Zilch is currently seeing around 4,000 sign ups a day on its app and has more than 500,000 users.

“We didn’t want to be beholden to the retailer and wanted the relationship with consumer. We go to them and say, pay over time, and use us anywhere you like,” Zilch chief executive Philip Belamant said according to Tech Crunch.

“We built this technology plugging them in on one side and plugging retailers on the other. We can now build up any way to play and can use it anywhere they like without being restricted by retailers.”

In a report from Worldpay, the world’s third biggest ecommerce market, buy now, pay later schemes will account for 10 per cent of all online sales by 2024.

The UK’s financial’s authority is to re-examine the regulation of the space.

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