Buy-now pay-later firm Zilch said it was eyeing a push into bill and rental payments today as it sailed past the three million user mark and announced it had hit gross profits for the first time.
Zilch, which allows shoppers to pay in instalments via a “commerce card”, has notched a surge in customers in the past three months as Brits increasingly turn to credit as the cost of living soars.
The London-based fintech is one of the few BNPL providers currently regulated by the Financial Conduct Authority and argues its model is well placed to support customers as they grapple with the rising cost of living.
The announcement comes amid disquiet over the availability of BNPL credit to pay for essentials and food, however. Klarna, which operates a ‘checkout button’ BNPL product as opposed to a card, riled debt charities recently over a partnership with takeaway firm Deliveroo.
Zilch also came under fire earlier this year for offering shoppers the chance to pay for pizza with its card.
But boss Philip Belamant told City A.M. today the firm offers shoppers a useful money management tool in times of strife.
“It’s never been more important for customers to know exactly how it is that they can better manage their finances and so I definitely do think that you’re seeing customers come to Zilch to say I want access to a better form of credit,” he said.
Belamant added that the firm was now eyeing a push into payments on bills, rent and travel expenses.
“Investors are very excited about rent and then obviously, anything to do with travel. But the bills and payments market is almost $45 trillion – it’s a massive space,” he told City A.M.
“If we can play meaningfully in that space, obviously our investors and stakeholders are really excited about that.”
The plans are likely to unsettle campaigners who argue the products are plunging Brits into mounting levels of debt amidst a cost of living crunch.
Debt charity StepChange told City A.M. last month that the convenience of the products meant those with “less financial experience” to make “impulse purchases” without realising there can be “serious financial consequences.
The plans will mark the next stage of growth for the fintech firm which has expanded rapidly since launching in the UK in September 2020.
Zilch boasts an investor list including Goldman Sachs Asset Management, Gauss Ventures and Ventura Capital and was valued at over $2bn in its latest funding round in November 2021.
The firm claims to have saved customers over £75m in rewards and savings on fees and interest payments.