Zip Turns to Primer to Expand US BNPL Share

Zip has teamed with Primer to further tap into the U.S. buy now, pay later (BNPL) market.

“With an $11 trillion total addressable market in the U.S., BNPL services account for a mere 2% of all payments,” Zip Co-founder and U.S. CEO Larry Diamond said in a Monday (Sept. 11) news release.

“Our partnership with Primer not only accelerates Zip’s growth trajectory but also positions us to seize this colossal market opportunity in a scalable and sustainable manner.”

According to the release, Primer — a payments and commerce infrastructure company — will help Zip access and connect to new card acquirers and processors and fraud and communication tools while leveraging features like fallbacks to reduce operational costs.

In addition, Prime also plans to add Zip as a payment option, letting merchants in the retail, fashion, travel and mobility sectors make Zip part of their payments stack.

The collaboration is happening at a time when BNPL options are gaining popularity due to their easy access to credit and flexible payment plans beyond the traditional 30-day schedule.

PYMNTS intelligence shows that consumers spent an average of $1,692 using BNPL and $1,006 with credit cards. Among millennials and Gen Z consumers, the prime demographic for BNPL, the dollar value of BNPL purchases exceeded those made with credit cards.

According to the PYMNTS study “The Credit Economy: How Younger Consumers Make Credit Decisions,” Gen Z consumers chiefly use BNPL for practical, smaller purchases, such as clothing, which made up 39% of BNPL use among Gen Z shoppers, trailed by groceries and restaurant purchases.

“Credit alternatives such as BNPL are gaining traction among consumers, particularly millennials and Gen Zers,” PYMNTS wrote. “While credit cards still dominate the credit product market, the average amount consumers spend via BNPL is higher than credit card purchases, indicating a preference for using BNPL for larger transactions.”

Primer’s partnership with Zip comes a little less than two months after the company teamed with Volt to allow its customers to accept instant account-to-account (A2A) payments using Primer’s payment automation platform.

“As the world of payments evolves, it’s essential for merchants to be able to offer a plethora of different payment options, leveraging open banking technology to give consumers as much choice as possible when it comes to making payments,” Primer CEO Gabriel Le Roux said.