Zip Co: The Sydney BNPL Giant Using AI to Power Buy Now Pay Later for Australian Shoppers

Zip Co is one of Australia’s original BNPL companies and one of the few to come through the sector’s consolidation with its Australian operations intact. The Sydney-listed company (ASX: ZIP) uses AI across its credit decisioning, fraud detection, and customer experience: processing millions of transactions for Australian shoppers every month.

What Zip Co does

Founded in Sydney in 2013, Zip lets consumers split purchases into instalments: either at checkout (Zip Pay) or as a revolving credit line (Zip Money) for larger purchases. It operates across retail, healthcare, automotive, home improvement, and travel, with merchant partners including major Australian retailers and thousands of SMBs.

After pushing into the US and other markets, Zip has pulled back on its core Australian and New Zealand business, where it has more than 2 million active customers.

How AI is used

• Credit decisioning. Zip’s proprietary AI models assess credit risk in real-time at checkout, combining bureau data, transaction history, and behavioural signals to approve or decline in seconds.
• Fraud detection: machine learning models monitor transactions for anomalies, device fingerprinting, and behavioural patterns that indicate fraud: particularly account takeover and synthetic identity fraud.
• Dynamic credit limits. AI adjusts customer credit limits based on repayment behaviour and financial signals, rewarding reliable customers with increased limits over time.
• Personalised offers. Zip’s app surfaces merchant offers and promotions personalised to each customer’s shopping history and preferences.

Why it matters for small business

For Australian SMBs, accepting Zip means offering a payment option that a significant portion of customers actively prefer: particularly for purchases over $200. Zip handles the credit risk; the merchant gets paid upfront.

Zip’s merchant fee structure is higher than standard card processing, so it’s worth evaluating whether your customer base actually uses BNPL. In sectors like healthcare, dental, veterinary, and home improvement, BNPL acceptance rates are meaningfully higher than average.

Related: AI + Xero Deep Dive: Beyond the Basics for Australian Small Business | Prezzee: The Sydney Platform Making Gift Cards Smarter With AI

This profile is part of SmallBizAI.au’s guide to Australian AI companies by industry and our Australian AI Companies directory.

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