Zip Is The Latest BNPL Provider Leaving The UK

Another BNPL player looks to exit the UK market in a surprise development. Zip, an Australian buy now, pay later player, entered the UK market roughly a year ago. Today, the company wants to liquidate its UK arm to buyers, confirming the market has gotten oversaturated. 

Zip Is Leaving The UK

It is an interesting time for Australian BNPL service providers. Various companies have tried to expand into Europe – and primarily the UK – but they are slowly reversing that decision. It is unclear why that is happening exactly, although it is safe to assume the buy now, pay later concept peaked a while ago. Overall inters tin this payment option continues to wane, and that sudden decline has hit the UK the hardest. 

Zip only entered the UK market a year ago in an ambitious and bold move. Unfortunately, liquidating its UK arm is only the recent worrisome development for the BNPL player. Zip has cancelled its merger with Sezzle, sold off Pocketbook, and is now looking to reduce overhead costs even further. Unfortunately, money is apparently drying up for the company, and finding new VCs or other investors has proven challenging. 

With the UK branch up for sale, it will be interesting to see if any buyers emerge. Additionally, it is unclear what will happen if no buyer comes forward. Shutting down the UK unit altogether would be the most straightforward outcome, putting many people without a job. Macroeconomic events continue to hurt and affect the finance and fintech industry globally. 

The bigger question is whether there is a future for BNPL service providers. While it is appealing to buy something today and pay for it later – through instalments – it also triggers tremendous financial risk and irresponsible behavior. Further regulation of the business model seems warranted. That move may reduce the number of industry players even further, though.