nav
Business Operations Business Models

How Does Quadpay Make Money (Business and Revenue Model)

The Quadpay business model

Quadpay Zip logo
Here’s what you should know:
  • What is Quadpay, and how does Quadpay work?
  • How does Quadpay make money?
  • Merchant Fees
  • Platform Fees (Convenience Fees)
  • Late Fees
  • Interchange Fees (Zip Card)
  • Quadpay subsidiaries, acquisitions, and exits
  • Quadpay profit and revenue
  • What is the Quadpay business and revenue model?
  • Quadpay funding, net worth, and valuation

How does Zip, previously Quadpay, make money? Here is a full, in depth, breakdown of their four (4) revenue streams and the different products and services they offer, as well as the Quadpay business and revenue model, how much Quadpay makes per year, and how Quadpay works.

What is Quadpay, and how does Quadpay work?

Zip, previously Quadpay, is a financial service that allows consumers to make purchases with retailers without having to pay anything at the time of purchase called “buy now, pay later” (BNPL).

Founded in 2017 by Adam Ezra and Brad Lindenberg, Quadpay went on to later get acquired by Zip on June 2, 2020, for an undisclosed amount.

Since that time, Quadpay now has more than 51,000 partnering merchants, 7.3 million customer accounts, as well as handling $5.72 billion in transactional volume in 2021 alone.

So, how does Quadpay work? To use Quadpay, users can simply either download their mobile app on Apple Store or Google Play store; or visit their website and sign up for an account.

After an account is created, users can browse around from partnering retailers. Once they find something they like, they can add those products to their cart, tap “Pay with Zip”, pay the first installment, and complete the purchase. Customers will then have three (3) more “due date” installments spaced out over the next 6 weeks.

Some of Quadpay’s competitors include Klarna, AfterpayAffirmSezzleSplitit, and other “buy now, pay later” services.

Quadpay App in Apple App Store | Quadpay Business Model | How Does Quadpay Make Money? | How Does Quadpay Work?
Source: Apple App Store | Quadpay (Zip)

How does Quadpay make money?

According to Quadpay, Quadpay now has more than 51,000 partnering merchants, 7.3 million customer accounts, as well as handling $5.72 billion in transactional volume in 2021 alone.

So how does Quadpay make money off of all those merchants, customers, and transactional volume?

Below is a breakdown of how much money Quadpay makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 4 ways of how Quadpay makes money in 2022

Quadpay has a revenue model that makes money in four (4) ways; merchant fees, convenience fees, late fees, and interchange fees from their Zip Card.

#1. Merchant Fees

One of the ways Quadpay, aka Zip, makes money is through the fees it collects from its partnering merchants on each transaction.

As noted above, Quadpay handled more than $5.72 billion in transactional volume for over 51,000 partnering merchants in 2021 alone. Of which, Quadpay takes an estimated 5.9% merchant fee on all of it. (per reports)

Quadpay (Zip) Merchant Fees:

  • $0.30 (processing fee) plus 5.9% of the purchase total
Quadpay Fees | Quadpay Business Model | How Does Quadpay Make Money? | How Does Quadpay Work?
Source: Quadpay (Zip)

Note: Quadpay partners with more than 51,000 merchants.

#2. Platform Fees (Convenience Fees)

Another fee Quadpay makes money off of is the platform fees, or convenience fees, they charges their customers.

This happens when customers use Quadpay’s checkout on their website instead of the merchants website or in-store. So because of this, Quadpay charges customers a $1 “convenience fee” per installment.

Quadpay (Zip) Convenience Fees:

  • $1 per installment (a total of $4 per order)

Note: Quadpay has 7.3 million customer accounts. Although it’s unclear how many of them opened installments through Quadpay’s checkout via the merchant directly.

#3. Late Fees

In addition to merchant and convenience fees, Quadpay also makes money from late payment fees.

Late fees happen when a customer has not paid their total minimum payment in full by the due date noted on the customer billing statement. How much the fee is depends on the state the customer resides in, which you can see below.

Quadpay (Zip) Late Fee:

  • a late fee of $5, $7, or $10 (depending on the customers’ state of residence)

#4. Interchange Fees (Zip Card)

Lastly, Quadpay also makes money off of the interchange fees they receive from their visa debit cards.

How does Quadpay make money from interchange fees? QuadPay makes money whenever a cardholder swipes their Visa issued credit card.

When this happens, Visa charges the merchant an interchange fee between 1.15% + $0.05 to 2.40% + $0.10 of the charge amount. From that, Visa gives a percentage of its interchange fee revenue to Quadpay. Although it’s unclear what percentage Quadpay receives from Visa.

Quadpay subsidiaries, acquisitions, and exits

Aside from Quadpay being acquired by Zip, Quadpay has had its own fair share of acquisitions as well.

To date, Quadpay, Inc. has made a total of 1 acquisition.

Mergers and acquisitions business model
Source: Crunchbase | Quadpay (Zip)

Quadpay profit and revenue

In 2021, Quadpay (Zip) reported $403.2 million in revenue.

Note: Because Zip Co Ltd, the parent company of Quadpay, is a publicly traded company, on the Australian Stock Exchange (ASX). You can find all of Zip’s publicly released financial reports, including annual reports, through Zip’s investor section on their website.

What is the Quadpay business and revenue model?

Quadpay (Zip) makes money through a few revenue models that they combine within their company, they are:

  • Commission based business model
  • Fee for service (FFS) business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

Quadpay funding, net worth, and valuation

On June 2, 2020, Quadpay was acquired by Zip for an undisclosed amount.