A Retailer’s Guide to Accepting Afterpay and Zip Pay In-Store

Buy now pay later services grow sales, increase average basket size, and improve customer loyalty. Learn how to quickly and easily accept Afterpay and Zip Pay through your point-of-sale or eftpos machine.

Why should retailers care about Afterpay and Zip Pay?

Afterpay and Zip Pay are ‘buy now pay later’ services that enable consumers to purchase a product and then pay for the purchase in instalments.

Customers love buy now pay later services because they enable instant gratification — they can receive their goods immediately and worry about paying for it later.

This is reflected in the growth of buy now pay later services. As of 2020, Afterpay has 3.1 million Australian customers and Zip Pay has 1.7 million Australian customers. And some analysts are estimating that almost 10 million Australians will be using buy now pay later services by 2025.

At the same time, retailers are rushing to keep up. According to ASIC, the number of merchants offering buy now pay later services grew 5,000% in two years. And now over 35,000 stores accept Afterpay and over 17,000 accept Zip Pay in Australia and New Zealand.

Importantly for retailers, research has shown that customers will choose where they shop based on how they can pay. And they prefer to shop at retailers that offer Afterpay and Zip Pay in-store. This means that retailers that don’t accept buy now pay later in-store risk losing customers.

Benefits of accepting Afterpay and Zip Pay

Put simply, you need to accept Afterpay and Zip Pay because your customers are demanding it. However, there are a number of additional benefits of accepting Afterpay and Zip Pay in your store, including:

  • Increase sales. As more customer use Afterpay and Zip Pay, they seek out stores that accept these payment types. Zip reports that stores experience up to a 30% increase in sales. And Afterpay’s shop directory is sending over 8 million customers to their merchants every month.
  • Increase average order value. Customers using Afterpay and Zip Pay can pay their purchases over a longer period of time, so they spend more. Afterpay and Zip Pay report that their merchants increase their average order value by 20-70%.
  • Grow customer loyalty. Zip Pay reports that their merchants see an increase in repurchase rate by up to 80%.
  • Minimise risk. All the credit and fraud risk is covered by Afterpay and Zip Pay, so once the transaction is approved you know that you’re going to get — and keep — your money.
Zip Pay benefits for merchants

Zip Pay (and Afterpay) offer a number of benefits for merchants

How much will Zip and Afterpay Cost my business?

The general fee structure for Afterpay and Zip Pay is as follows:

  • Afterpay: Flat fee of 30c, plus a commission of between 4-6% of the total transaction value.
  • Zip Pay: Flat fee of 15c, plus a commission of between 2-4% of the total transaction value.

The exact value of the commission depends on the type of business you are, how much volume you transact, and the specifics of your contract with the buy now pay later provider.

Option 1: Accept Afterpay and Zip Pay through the point-of-sale

How does it work?

The most common way to accept Afterpay or Zip Pay in your store is through your point-of-sale system.

To enable this feature, you will need to contact your point-of-sale provider, check they offer Afterpay or Zip Pay, and then ask them to enable the feature.

Once the feature is enabled, the purchase process is quite simple:

  1. Scan or enter the products to be purchased as normal. For most businesses this will simply require you to scan the barcode of the products, so they appear in your point of sale software.
  2. Confirm the sale by pressing Afterpay or Zip from the payment options list. Instead of pressing cash or card, you should be able to select Afterpay or Zip Pay. If not, speak to your point-of-sale provider to confirm they have enabled the feature.
  3. Enter the customer’s in-store number or scan the QR code. Ask the customer to show you the number or QR code that sits in the Afterpay or Zip app, then enter it into the point-of-sale software.
  4. Prompt the customer to approve the purchase on their mobile. A confirmation screen will appear on the customer’s Afterpay or Zip Pay app, they will need to confirm the purchase. This will trigger the first 25% of the payment to be charged immediately.
  5. Wait for the purchase confirmation on your point-of-sale software. If everything has worked, your point-of-sale will confirm the purchase and ask if you want to print a receipt.

You can see an example of the Afterpay payment prompt for Vend POS below. The merchant has scanned the product, pressed Afterpay, and now can type in or scan the Afterpay barcode:

Afterpay in-store with Vend

A merchant can accept Afterpay in-store by scanning or typing in a customer’s in-store code

Which point-of-sales providers offer this?

Not all point-of-sale solutions have integrated with Afterpay and Zip Pay. Those that do accept Afterpay and Zip Pay include:

  • Afterpay: Vend, Magenta Retail, Retail Directions, Retail Express, IT Visions, CIN7, Cegid, Erply, BizFlex, Markinson, Niche, Simple Salon, Timely and Osipos.
  • Zip Pay: Pronto, Vend, IT Visions, Erply, Quest, Magenta Retail, Zenoti, Sym-Pac, Retail Directions, RetailEdge, Retail Express, Advance Retail, POS Solutions, Gumnut, Kudos, Solemate, Exact POS, Future Business Systems, Future4, Microsoft Dynamics, Island Pacific, Oasis, Costar

Option 2: Accept Afterpay and Zip Pay through the eftpos machine

How does it work?

The second way to accept Afterpay and Zip Pay in-store is through the eftpos machine. Although most eftpos machines cannot accept Afterpay and Zip Pay payments, a number of providers have started building out the capability.

The best eftpos providers will both integrate with the point-of-sale, as well as accept Afterpay and Zip Pay. This means that every transaction is accurate and visible in your point-of-sale dashboard.

To enable this feature, you will need to contact your eftpos provider, check they offer Afterpay or Zip Pay, and then ask them to enable the feature.

Once the feature is enabled, the purchase process is quite simple:

  1. Scan or enter the products to be purchased as normal. For most businesses, this will simply require you to scan the barcode of the products, so they appear in your point of sale software.
  2. Confirm the sale by pressing Afterpay or Zip from the payment options list. Instead of pressing cash or card, you should be able to select Afterpay or Zip Pay. If not, speak to your point-of-sale provider to confirm they have enabled the feature. After selecting Afterpay or Zip, a prompt should appear on the eftpos machine asking for the customer’s in-store code.
  3. Enter the customer’s in-store code on the eftpos machine. Ask the customer to input their unique store code into the eftpos machine. This code will be found within their Afterpay or Zip app.
  4. Prompt the customer to approve the purchase on their mobile. A confirmation screen will appear on the customer’s Afterpay or Zip Pay app, they will need to confirm the purchase. This will trigger the first 25% of the payment to be charged immediately.
  5. Wait for the purchase confirmation on your point-of-sale software. If everything has worked, your eftpos machine and point-of-sale will confirm the purchase, and then ask if you want to print a receipt.
Quest Eftpos Zip Pay Integration

Quest allows you to accept Zip Pay through the eftpos machine. Source: Quest

Which eftpos providers offer this?

As of publication in July 2020, no Australian eftpos providers offer Afterpay acceptance through the eftpos machine. However, a few eftpos providers do offer Zip Pay acceptance:

When and how do I get my money?

When you sign up with Zip Pay and Afterpay, you nominate a bank account in which you will receive your funds.

Funds will arrive in your nominated bank account the next business day after the transaction for Zip Pay and two days after the transaction for Afterpay. Both services will take our their fees and then send you the net settlement total, so the total funds landing in your bank account will be less than the total value of purchases.