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Zip (ASX:Z1P) share price jumps on Microsoft integration agreement

Here's what is moving the buy now, pay later company's shares today…

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Mitchell Lawler
Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.
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The Zip Co Ltd (ASX: Z1P) share price is moving higher on Thursday. At the time of writing, shares are swapping hands for $7.34, up 5.45%.

This follows the buy now, pay later (BNPL) company announcing a new agreement with US-based tech giant Microsoft Corporation (NASDAQ: MSFT).

shaking hands over montage suggesting a takeover or merger

Image source: Getty Images

What's sending the Zip share price higher today?

Investors are bidding up shares in the second-largest BNPL company on the ASX on Thursday. This is on the back of an announcement that appears to have caught the attention of the market.

According to the release, Zip has entered into an agreement with the second-largest listed company on the planet by market capitalisation – Microsoft.

This agreement involves the integration of Zip's technology into the shopping experiences within Microsoft Edge. In turn, shoppers using the web browser will be able to use a digital payment option provided by Zip.

The integration into the company's web browser will begin rolling out in the United States first.

Clearly, the market is chuffed with the news as the Zip share price pushes higher. As noted in the release, the integration unlocks access to more than 1.3 billion devices running Windows 10.

Management commentary

Commenting on the news, Zip co-CEO Brad Lindenberg stated:

Zip provides customers with a transparent, digital payment option, and we are excited to integrate with the shopping experience in Microsoft Edge. Microsoft Edge is a web browser that is built for shopping, and Zip is built for consumers looking for flexible payment options.

The expansion to Microsoft's web browser follows news last week of Zip's entrance into the BNPL market in India. To make this possible, Zip made a strategic investment in leading Indian BNPL operator ZestMoney.

Company snapshot

Despite the recent announcements, the Zip share price is down around 2% over the past 6 months. However, year-to-date the company's shares have appreciated approximately 26% in value. As a result, Zip now holds a market capitalisation of $3.92 billion.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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