Buy-now-pay-later outfit, Zilch, has launched a new credit payment product, allowing customers to spread interest-free repayments over three months. The company said the ‘Pay over 3 months’ product will provide more flexibility to customers and boost Zilch’s market share.

The new ‘Pay over 3 months’ product has already been made available to around 100,000 Zilch customers in a trial. Eligible customers from Zilch’s more than 3.6 million registered users will be offered the new product from April 2024. The launch will provide Zilch customers with greater choice when paying. Specifically, they can go into the app and choose between ‘Pay over 3 months’, the shorter-tenor ‘Pay over 6 Weeks’ or, for day-to-day purchases, Zilch’s reward-earning ‘Pay Now’ debit product where they earn up to 5%.

When opting to ‘Pay over 3 months’, Zilch customers will pay 25% up-front. They can then spread the remaining purchase price over three instalments, as they currently do when making interest-free credit repayments over six weeks. Zilch offers this as a regulated product under its FCA consumer credit licence. This product allows customers to build their credit scores each month. This comes via Zilch’s reporting agreements with the UK’s leading credit reference agencies.

The product applied a higher minimum spend threshold of £75 during beta testing. Customers’ three-month borrowing will be capped at personalised and dynamic affordability limits.

Customers use their Zilch card on average 100 times a year

Philip Belamant, CEO and co-founder of Zilch, said: “In the past three years Zilch has successfully delivered more than 50 million customer transactions and £2bn in customer spending, yielding us extensive behavioural datasets. This is because customers today use Zilch on average more than 100 times annually to manage their day-to-day spending across debit and credit. Today’s product launch moves Zilch closer to our end game of capturing total share of wallet. This new payment option is tailored for significant purchases or emergency moments, such as buying electronics, car tyres or home repairs like when the boiler breaks. As Zilch is FCA-regulated, customers can spend with the confidence that every payment over £100 is covered under section 75 of the Consumer Credit Act. It’s simply the best way for any adult to pay – especially in today’s economic climate.”

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