Zip co-founder Larry Diamond said he was not concerned about payment "elephant" PayPal.Credit:Peter Braig
Investors were reacting to a new offering from the $245 billion payment giant PayPal,which will allow users to pay for items in four instalments,dubbed'Pay in 4'. The service will cost merchants and consumers less than what they pay to existing BNPL players and will be available to the company's 190 million US users.
Analysts have flagged concerns that operators reliant on US expansion such as Afterpay and Zip,which recently completed a $400 million acquisition of US BNPL company Quadpay,could be dwarfed by PayPal's size and market dominance.
"The faster BNPL grows and succeeds it will inevitably attract new competition and/or regulation,that will either reduce the economics currently enjoyed by participants,or limits their long term growth potential,"UBS analyst Tom Beadle said.
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However,Zip chief executive Larry Diamond is confident the company can outmanoeuvre the"payment elephant"PayPal.
"[Zip's] insatiable appetite for what's better for users,our deep and ongoing investment in innovation and ability to move quickly - that has and will always separate us from the global payment elephants,"he said.
"[BNPL] will become mainstream. As the overall pie increases,we are very well placed to capitalise on the increasing and rapid awareness,"he said.