This morning Zip Co Ltd (ASX: Z1P) announced a partnership with JB Hi-Fi Limited (ASX: JBH) that will see it provide a fully integrated payments solution for both JB HI-FI and The Good Guys.
It notes that this will allow customers with the ability to shop, both in-store and online, and pay with Zip's interest free buy now pay later (BNPL) payment solutions. The retailer has not previously offered BNPL options.
Zip's Co-founder and Chief Operations Officer, Peter Gray, commented: "We are delighted to partner with the JB HI-FI Group. We look forward to providing customers with choice at checkout, empowering them to own the way they pay at JB HIFI and The Good Guys. This strategic partnership provides Zip customers with access to even more of Australia's favourite brands, further delivering on Zip's mission to be the first payment choice everywhere and every day."
Is this good news for Zip?
Initially, this news went down well with the market, sending the Zip share price almost 3% higher. Since then, the BNPL provider's shares have given back these gains and more.
This may be due to the fact that Zip isn't the only BNPL solution that JB Hi-Fi is taking on board.
On Tuesday, rival Afterpay Ltd (ASX: APT) also announced a partnership with the retail giant for both JB HI-FI and The Good Guys brands.
It commented: "Customers will soon be able to shop in-store and online and spend up to $1,000 at all JB HIFI and Good Guys stores nationwide. By using Afterpay at checkout customers can spread their payment over four fortnightly instalments without ever incurring interest or fees if they pay on time."
Afterpay's EVP of Sales ANZ and Global Instore, Rachel Kelly, stated: "We are delighted to welcome the JB Hi-Fi group, with two of Australia's most iconic retail brands, to Afterpay. Afterpay customers will be thrilled to be able to buy big ticket items such as electronics, whitegoods, appliances and home entertainment in a responsible manner, without incurring interest or fees."
This appears to have taken the shine off Zip's announcement. Furthermore, it highlights the fact that it remains unclear whether JB Hi-Fi has also taken on other BNPL providers such as Openpay Group Ltd (ASX: OPY) or Klarna.
