Afterpay Vs Zip - Market Leader

PTG Benny on 30/03/2021 - 14:38

Hi OZB Community,

I may be a bit late to the party but I am looking at investing in either Afterpay or Zip shares.as I believe this industry has so much potential.

Both of these companies have taken a hit on the sharemarket with APT trading at $102 (high of $160) and Zip trading at $7.37 (high of $14.53) so they represent some value at the moment.

Question for the community - which of these companies do you prefer to use when a business offers both, which is easier to use, which has better customer service and ease of setting up an account etc.

I am interested in your feedback as you the customers will determine which company does better in the medium/long term.

Cheers

Benny

Financial

Related Stores

Afterpay
Afterpay
Third-Party
Zip
Zip
Third-Party

Comments

  • orangetrain on 30/03/2021 - 14:43
    +5

    Credit card companies will eat APT and Z1P.

    • Drakesy on 30/03/2021 - 14:51
      +1

      Agreed, at the time Afterpay and Zip had a niche, but banks/cc companies are about to eat them alive
      I have my doubts over the business proposal in only profiting if they can't make their 4 repayments for a sub $1,000 item.

      They're heading the same way as Paypal,
      i.e. down the gurgler.

      • JimB on 30/03/2021 - 15:47

        I agree that afterpay and zip will be destroyed long term but I thought Paypal is a much more robust business.

        Can I ask why you think Paypal will be heading down the gurgler?

        I quite like Paypal as a consumer. I don't have to provide merchants with my credit card details.. also I can pay my utility bills using Paypal-credit card without credit card fees, but if I paid my bill directly to my utility provider with my credit card- I get a charged a surcharge..go figure.

        • Okayy on 30/03/2021 - 16:50

          Whats PayPal credit card is it Australian product?

          • JimB on 30/03/2021 - 17:07

            @Okayy: should be Paypal linked to my credit card.

    • Indomietable on 30/03/2021 - 18:59

      Credit card companies will eat APT and Z1P.

      I don't think so.

      As long as you can pay apt/zip with credit card, credit card company won't eat them.

      Bigger threat would be players with established user base making their own digital wallet with loan component. In Asia more people transact using alipay/grab/jio vs credit card. If Apple/google/amazon can put a focus in this field, they can dominate.

      • plmko on 30/03/2021 - 23:45
        -1

        Bigger players will only make half arse attempts at this as they try to navigate the balance between risking their main business for a small disruptive business venture. You think CBA has the appetitive to compete seriously against APT/ZIP after their dance with Royal commissions and be roped into another one?

        Look at Paypal: small business loans, international transfers, FX, insurance, online wallets…..yet why are all their competitions in respective fields thriving?

        Do your own due diligence. Don't listen to those with scared money.

        • Indomietable on 31/03/2021 - 04:27
          +1

          You think CBA has the appetitive to compete seriously against APT/ZIP after their dance with Royal commissions and be roped into another one?

          Yes and it's coming . They've invested $300M in klarna last year, hopefully we'll start seeing klarna 45deals soon.

          why are all their competitions in respective fields thriving?

          It's big and new segment with no one or two company claiming biggest stake yet.

          Bigger players will only make half arse attempts

          Bigger players have money to burn, so it's easy to make assumption that they make half arsed attempts in everything.

          The keyword that I did not emphasised enough on my previous comment is focus. Amazon started as book store company but they put focus on cloud computing and now they dominate it. Apple is now the biggest headphones manufacturer.

          risking their main business for a small disruptive business venture.

          Oh boy, Micro lending and fintech is not small sector. It's growing and with massive future potential (ie Once users are used to transact using the app) . In China, WeChat/Alipay literally replace cash, credit card, micro loans and half of bank functions.

        • Baysew on 31/03/2021 - 09:36

          Yes CBA is hungry.

          As well as investing in Klarna, CBA is also setting up its own BNPL Commonwealth Bank launches buy-now-pay-later product in a bid to capture more Millennial spenders

          As for the Royal Commission -

          …the government has yet to implement 44 of the commission’s recommendations, and has turned its back on five key reforms.

          Hayne’s very first recommendation was that the existing “responsible lending obligation” – making it illegal to offer credit that was unsuitable for a consumer based on their needs and capacity to make payments – not be changed.

          But, last September, Frydenberg announced that this obligation had been costly to lenders and was delaying the approval of loans. The present principle of “lender beware” would be replaced with a “borrower responsibility”.

    • veej on 31/03/2021 - 10:35
      +1

      I don't believe that they will be threatened by any credit cards.

      I know people who use Afterpay a lot to pay off purchases who don't have credit cards and they can manage the payments with no problem.
      Zip and Afterpay are the new layby system for people who want to take their items home straight away.

      Both Australian companies have gone global since they are doing so well.

  • Hybroid on 30/03/2021 - 14:44
    +4

    I prefer Afterpay by far. No monthly service charge, you pay it off in 4x installments every 2 weeks (i.e. over 2 monthly paychecks) is reasonable. Website and app are also very slick.

    I don't use credit and don't buy anything I can't afford to pay in cash straight up. Afterpay is a nice to have buffer for purchases (e.g. $2k electric bicycle) but not a requirement to buy something.

    • Mechz on 30/03/2021 - 18:11
      +3

      I don't use credit

      If you use Afterpay, you use credit.

      • Hybroid on 30/03/2021 - 18:25

        Missed the credit cards word.

      • TilacVIP on 31/03/2021 - 08:55
        +2

        Then why the need to use Afterpay or Zipay??

        I have both, but the only time I chose to use either is if they offer some promotion. Otherwise, personally, to me, they are of no benefit. I'd just prefer to make the purchase on my credit card, but I can see the appeal to those who struggle with money.

        Personally, I believe both companies are way overvalued and eventually when things get back to normal in 6 - 12 months, they'll both have a share price much lower than today. No company is worth growing 10 folds in the space of 9 months when Afterpay went from $10 to over $150, and Zip went from $2 to over $14. For now the hype is over, but as I said we'll see in 12 months where things are?

        • Mechz on 31/03/2021 - 09:44

          I get where you're coming from but I think that this is a growing market as the banks are already trying to compete (see my deal post about BankWest interest free for a few months).

          When the market comes back and people have more money, they will spend even more and use Zip/AP to get more premium products to keep up with the Jones'/insta life. It's just how people who use these services live their lives.

    • p1 ama on 30/03/2021 - 18:14

      I don't use credit and don't buy anything I can't afford to pay in cash straight up. Afterpay is a nice to have buffer for purchases (e.g. $2k electric bicycle) but not a requirement to buy something.

      This is contradictory…

  • Cluster on 30/03/2021 - 14:52

    I finally signed up with AfterPay after ignoring the product for years. Why? eBay offered 20% off most purchases made through AfterPay. Sweet.

    That is of course being subsidized by someone (probably AfterPay shareholders), but if those kind of offers return I will be using AfterPay again.

    • MrHyde on 30/03/2021 - 15:11

      You didnt need to sign up to Afterpay to use those offers.

      Choose Afterpay as payment method to get discount applied and then pay with eBay gift cards

      Problem though is no paypal level buyer protection from either Afterpay or ebay.

      • Cluster on 30/03/2021 - 16:09
        +1

        That assumes I had some eBay gift cards on hand. Yes, it is a good point regarding no protection when using AfterPay.

      • nubix on 31/03/2021 - 10:14

        you can only use $1500 of ebay gift cards per day unfortunately

    • TilacVIP on 01/04/2021 - 08:47

      And most likely, you won't be using much at all unless there is a promotional offer, I'm guessing.

      I get up to 55 days interest free and a minimum of 30 days when buying with a credit card, so doesn't make much sense why I need to split the payment [x 4] up over a period of 8 weeks. I like to keep it clean and simple, then pay off the CC on or before the due date.

      As I've said, no harm in having an account with either, but for me, they are only an option to use when offering some promotion. YMMV

  • techlead on 30/03/2021 - 15:48
    +1

    From a customer perspective, Zip is way better, I love their app and their feature of generating a single use card number. I also like the terms, where it essential gives you an extra month of interest free period when coupled with your credit card.

    Further, payments to Zip counts in credit card reward programs, so you can use it to pay things which might not otherwise be eligible and still get the points!

  • capslock on 30/03/2021 - 16:49

    Hedge your bets and invest half in each. Both of their share prices are trending downward so I wouldn't be surprised if this trend continues.

  • Okayy on 30/03/2021 - 17:53

    I have been using Afterpay for long! I purchase through Afterpay and pay down their balance mostly next day! They keep increasing your spending limit. 😂 it’s a good handy product with no credit checks.

  • plmko on 30/03/2021 - 18:22

    Yes buy in now whilst the fud is strong in the market.

    Ignore all the dooms day fud, they don't see where the major BNPL companies are going.

  • Neoika on 30/03/2021 - 18:23

    Zip's default repayment schedule is set to charge customers monthly fee easily(, which is disgusting). I always manually pay it off after receiving my CC statement.

    Zippers, pay off the money spent in Feb in full by 31st to avoid $6 fee.

  • Ocker on 30/03/2021 - 18:25

    Beware of the fact as more BNPL players appear there is an increasing risk of the regulators stepping in. Particularly with respect to the retailer being able to pass on the commissions they are charged - something Afterpay does not allow at the moment.

    • plmko on 30/03/2021 - 23:40
      -1

      Completely irrelevant. Think about how big the Australian market is vs their world market (transparent info from financial statements), they only listed here for capital and not anything else.

      • Ocker on 31/03/2021 - 09:57

        Afterpay listed in Australia because as a startup Australian company they would have had buckley's of raising capital in a country where they were unknown

  • avoidfullprice on 30/03/2021 - 19:55

    I use credit card, so I find paying installments with a rolling balance easy to manage. Therefore would use Zippay over Afterpay for multiple, low value transactions

    I would use Afterpay if my credit is maxed out.

  • techlead on 30/03/2021 - 20:47
    +3

    I personally wouldn't touch BNPL shares

  • negger on 30/03/2021 - 23:52

    As a consumer, the benefits I see is promotions from them and may be extending your credit card interest free period. As an investor, I do not think their current margins are sustainable and they should see margin pressure soon enough especially with more more competition.The one with first mover advantage overseas market may be a safer bet but it is already priced in.

  • AussieDeals on 31/03/2021 - 00:08
    +1

    If you know what you are doing you can use Zip to effectively extend the interest free period on your regular points earning VISA/MasterCard by approx. 1 month, which allows you to keep cash in mortgage offset or savings account for longer before you pay off in full.

  • the Unforgiven on 31/03/2021 - 10:08

    Paypal will soon compete with Afterpay in that they will offer the same buy now and pay in 4 fortnightly instalments

  • Third_Gear on 31/03/2021 - 15:51

    Look at IOU.

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