Our Framework

December 10, 2025

As Buy Now, Pay Later (BNPL) usage continues to rise in the U.S., the industry has received increased focus from stakeholders seeking to better understand how BNPL products serve consumers. At Zip, we appreciate the opportunity to provide additional information about our model, our longstanding approach to responsible and transparent consumer experiences, and the principles that guide our product design and compliance practices. Zip has always sought to engage constructively with lawmakers and regulators, and we welcome continued dialogue about the BNPL sector.

A Responsible and Transparent Model

Zip serves more than four million everyday Americans. Our product is structured to help consumers manage purchases in a predictable and disciplined manner. This is reflected in core features of our product, including:

Low starting limits: New customers typically begin with around $200 USD in estimated spending power, with any increases earned gradually through consistent, positive repayment behavior.

Decisioning at every purchase: Unlike traditional revolving credit products, Zip conducts underwriting for every purchase, incorporating up-to-date internal repayment data and risk controls to ensure transactions are consistent with responsible usage.

Clear, predictable installments: Zip provides upfront payment schedules, predictive installment amounts, proactive reminders, and transparent, easy-to-understand disclosures.

Account pause on missed payments: If a customer misses a payment, the ability to make new purchases is paused until the account is current. This safeguard is designed to prevent overextension.

Payment-date flexibility: Customers may make one free payment-date change per purchase per month, which provides meaningful flexibility in the event of unexpected life events or irregular income timing.

Repayment Outcomes Demonstrating Responsible Use

The outcomes associated with Zip’s product underscore the effectiveness of these safeguards and the disciplined patterns of use we typically observe:

In FY25, over 98% of US transactions were repaid in full.

Zip US net bad debts for Q1 FY26 was 1.5% of total transaction volume.

The typical purchase is approximately $130, indicating customer use cases are centered on small, everyday expenses rather than large or long-term borrowing.

Supporting Fit-for-Purpose Regulation and Consumer Protection Standards

Zip supports consumer-friendly, fit-for-purpose regulation. We continue to operate in accordance with the Consumer Financial Protection Bureau’s 2024 interpretive rule on BNPL despite its subsequent withdrawal. The interpretive rule reinforced many practices that Zip had already implemented, including robust disclosures and clear dispute-resolution pathways. Although the rule is no longer in effect, we have maintained these consumer-protection practices as an ongoing component of our compliance framework.

We believe well-designed regulatory frameworks can improve consumer outcomes. Zip remains committed to contributing constructively to that effort. We appreciate the continued conversation to help ensure strong consumer protections across the sector while preserving access to credit for everyday Americans.