What will Zip Co Ltd (ASX: Z1P) shares do after it announced a partnership with Facebook?
What you need to know: Zip Business gives small and medium business owners access to Zip’s buy now, pay later digital wallet to help run their business and pay for everyday expenses interest free.
Zip partners with Facebook
Zip said that it is partnering with Facebook that will enable small and medium-sized Australian businesses to use Zip Business to pay for advertising on the global social platform.
Currently in testing, the service will enable small businesses advertising on the platform to reach the millions of Australians without impacting their cashflow (as much).
Zip said this partnership is the next exciting step in the development of Zip Business, The full service will commence with a controlled, staged roll-out, starting with Facebook pre-paid advertisers.
Peter Gray, the Zip co-founder, said: “With 14 million Australians using Facebook every day, the social network is an increasingly important advertising channel for small businesses.
“Providing Zip as a payment option makes Facebook advertising even more accessible and valuable to business owners and helps smooth their cash-flow.
“Small businesses are a crucial part of the Australian economy, making up almost 98% of the business sector. For many of these businesses, cash-flow is a primary concern, and 92% of small businesses believe they would have generated more revenue in the previous year if their cashflow was better. Partnering with Facebook is an important step not only in the expansion of Zip Business, but in helping small business owners to capitalise on recent growth in the e-commerce sector and to get ahead.”
Summary thoughts
I’ve been impressed by the different moves that Zip has made. Not only has it grown the core Zip product in Australia, but its international expansion acquisitions make a lot of sense and have turned it into a global player.
Partnering with Facebook is a smart move, particularly if Zip could be integrated with some of Facebook’s other sections – such as where users buy cars or other goods from businesses or a user from a group.
However, in terms of ASX growth shares in the payment world, I prefer the digital giving business Pushpay Holdings Ltd (ASX: PPH) which is rapidly growing its margin.
