Meet Zilch: London-based Klarna and Clearpay arch rival becomes first ‘buy now pay later’ fintech to secure FCA licence


With COVID-19 accelerating the overall industry trend towards all things digital, businesses are looking for trusted ways to help drive average order values and conversion, without taking on additional costs. At the same time, consumers are looking for more flexible and responsible methods to pay online. With this transformation, Buy now, pay later (BNPL) options like Klarna, Clearpay are sweeping over the globe. Klarna, one of the world’s biggest fintech’s and most widely available BNPL provider, is now valued at $11bn, the highest-valued private fintech in the continent.

Another one to join the bandwagon of success in this category is the UK-based fintech Zilch. Based out of London, the fintech startup has different aims and wants to redefine the BNPL market – by being completely on the side of the consumer, especially when COVID-19 continues to impact all. 


Recently, Zilch has become the first company in the market to become fully Financial Conduct Authority (FCA) licensed and looks like the process went smooth, unlike Lanistar. 

Zilch claims to have born with regulation in its DNA and the startup has been working with the FCA for over 12 months, using the innovative Sandbox programme to achieve part and now full compliance levels. 

Talking about growth of the startup so far, Philip Belamant, CEO and Founder of Zilch adds, “By taking accountability for customers, Zilch removes the anxiety associated with credit. Our proprietary data-driven credit assessment technology focuses on optimising users’ cash flow and ultimately preventing spiralling debt. Already, Zilch is growing at lightning speed with quarterly growth exceeding 120% and monthly registrations now at 30,000.”

Zilch: All about users’ accessibility 

Basically, Zilch is an over-the-top (OTT) BNPL product that allows its customers to shop wherever Mastercard is accepted and spread their payment over 6 weeks for zero interest and zero fees whenever they chose to buy from one of Zilch’s 5,000+ retail affiliate partners. Unlike traditional BNPL products that require technical integration with merchants, Zilch’s model does not require any integration and can thus instantly provide its users’ accessibility everywhere.

Zilch delivers its proposition to customers by leveraging its strategic partnership with Mastercard. Customers can pay over time anywhere they like online at big brands such as Amazon, eBay, Ali Express, Nike, and more.

Speaking with UKTN exclusively, Belamant says, “Our customers can shop wherever they like and don’t have to rely on Zilch having merchant partnerships. Lending is streamlined – rather than having to balance multiple payment timelines from multiple different BNPL providers at multiple retailers, we allow customers to have one consolidated way to get discounts, deals and pay over time anywhere they like.”

How Zilch is different from competitors?

Founded in 2020 this newest BNPL fintech is highly ambitious and wants to take over the market leaders by being offering users a seamless, interest-free experience.

Zilch’s unique ‘over-the-top’ platform means that it doesn’t not rely on merchant partnerships, consumers can use Zilch in any UK online store – ASOS, Boohoo, Amazon you name it. This makes the lending streamlined for users rather than having to balance multiple payments timelines for different BNPL providers.

Belamant says, “There is one fundamental difference that separates Zilch from others – existing BNPL providers focus on the retailer, they sell to the retailer, negotiate with the retailer, plan with the retailer and deliver for the retailer. This approach doesn’t always take into account the customer. Zilch focuses on the customer, and we spend each day building value-add features and creating partnerships that will benefit the customer. If we are successful in delivering this value to our customers then retailers will benefit as a consequence.” 

Open Banking Tech

Further, Zilch is the only BNPL player in the industry to take advantage of Open Banking Technology combined with soft credit checks. With this, they get a real-time view and understanding of a customers affordability and won’t lend a customer more than they can afford the payback, removing the possibility of indebtedness and credit-related anxiety.

“We are also the first BNPL player to combine Open Banking Technology with soft credit checks. If a customer misses a payment we count that as a personal failure on our part,” says Belamant.

Business model

Further, the company explains, Zilch never makes money on the consumer – they make money through an affiliate commission from each merchant and the interchange with Mastercard. “We make money through retailer commissions and never charge our customers any interest, hidden or late fees.”

Recently, they also launched a Snooze feature to allow consumers to delay repayment of an instalment or entire payment plan by between four and seven days, with no interest or fee. 

Snooze: How does it work?

Customers are assessed using a combination of open banking and soft credit checks in order to offer the BNPL feature in real-time. If Zilch is alerted to a negative change in a user’s earnings, the platform will actively suggest the feature in a bid to maximise their cash flow.

Belemant says the feature will help customers who have been hit hardest by this year’s COVID-19 pandemic “through no fault of their own”, whether they’ve seen a drop in their income, or even lost their job entirely. 

“It’s more important now than ever to provide our customers with a proactive way to inform us that they need more time to complete a payment or need to tweak the repayments schedule,” he adds. “Snooze is a quick, simple and free way to do this without having to spend time on the phone/chat/email to a support team.”

More funding

In September 2020, Zilch raised £10 million from undisclosed investors. On future external funding annoucements, Belemant reveals, “With the dramatic growth we are seeing, we are just about to complete a new interim round – watch this space for an update soon.”

Led by Philip Belamant, founder and CEO, Zilch released its original BETA product in August 2019 and has experienced a huge level of traction since, particularly from young millennial and Gen Z markets. Now, over 15,000+ new customers sign up for Zilch every month. The company released its original BETA product in August 2019 and has experienced a huge level of traction since, particularly from young millennial and Gen Z markets.