The ‘Googlisation of Payments’: an interview with Zilch CEO Philip Belamant

In the midst of a packed week for Money 20/20, Zilch co-founder and CEO Philip Belamant spoke to AltFi about the fintech’s shiny new platform: ASPN.

No, not ESPN, ASPN: Ad-Subsidised-Payments-Network (pronounced aspen).

The ad-sales platform, which Belamant launched live on stage at the conference in Amsterdam, offers merchants and third-party customers a peek behind the curtain at what Zilch has had ticking away in the background for some time.

According to the ‘buy now, pay later’ (BNPL) and now advertising technology platform, the ad-sales platform achieves conversion rates of up to 55 per cent — more than 10 times higher than the search industry average.

It allows retailers to offer “contextualised advertising deals” straight to customers through the vertically integrated payments app with immediate attribution, showing the direct conversion of ads to sales.

“The Googlisation of Payments”

A hefty title, but what does it actually mean? And why would Zilch offer this to third parties globally?

The platform was initially created to power the company’s own BNPL product, which attracted more than three million customers in 24 months, and sees more than 5,000 retailers putting their advertising money into Zilch, which only charges for sales.

ASPN is now available through open APIs to any third-party app or card issuer that might wany to be integrated, which puts the potential customer base at around 38 million merchants worldwide.

Merchants will be able to adjust commissions and attribute sales in real time, both online and offline, without changing their payment infrastructure.

So far, Zilch has driven more than $1.7bn in commerce through this ad engine — which it has been using internally for more than six months now.

“We’re making the API available for third parties, which is something that a lot of people looking at go, ‘But couldn't maybe people compete with you guys then against your own product?’ And the way we think about it is the problem is so big. The market so huge. But the problem is big and growing bigger with the cost of living crisis,” Belamant told AltFi.

“Everyone is feeling because of the crisis, people who weren't checking prices are checking prices. And our view is if someone can genuinely go and use our technology to build a better product for consumers than we've built over the last four years, 24/7, every day and night, that’s great. 

“And if we can empower them to do that we still doing good by the customer. And we’re still part of that ecosystem, even if it means that they're not using our app. So our view is just that this is for the betterment of society. It's going to save consumers billions. We should do it anyway.”

Eliminating the cost of consumer credit

Bettering society and doing good by the consumer is a core part of Zilch’s ethos, even down to the company mission: to eliminate the cost of consumer credit, for good.

With ASPN, the hope is that it will take the fintech a step further on its mission — it’s a win for consumers who will get access to interest-free-credit, savings and rewards on purchases, and it’s a win for retailers that will have access to a huge network of consumers.

It’s also a win for Zilch, which will tap into a new stream of business-to-business revenue, and help cement it as the place where its users automatically go to to shop.

So the element of competition doesn’t phase Belamant.

“If we really do drop the ball from here, genuinely, it's our fault,” Belamant said.

“As a business and for everyone we employ in our business, we always say, ‘put yourself in a position where you can blame no one but yourself’. That's the best spot to be. And that's what we think we're doing here by saying, ‘Let's empower others to come and compete if they want to’.”

While there is no shortage of competitors in the BNPL space, as Belamant points out there are a lot of people that aren’t quite in the same realm as Zilch specifically.

“But let's empower people to go and help consumers,” he says.

“And if they directly compete with us, we're gonna raise our game anyway.”

A regulatory crystal ball

So what is it that puts Zilch in a side room off the hallway from the rest of the BNPL players?

According to Belamant, it’s regulation.

A hot topic in BNPL right now as the government sets out to bring better consumer protection and more enforcement on consumer lenders, Belamant said that at Zilch, which was regulated from the get-go, they’re often asked if they somehow predicted that mandatory regulation was in the pipeline. 

No, they’re just customer-first rather than retailer-first, according to Belamant.

“All we did is we wanted to have a relationship and provide a service to customers,” Belamant said. 

“And if you're providing credit to customers, you have to offer them protection, they must have those protections, the Financial Ombudsman Service etc. And so that's why we went down this route of regulation. So this is just a completely different approach to the market.”

Customers are typically using Zilch for around 33 per cent of their purchases, but they want to see this at around 60 or 70 per cent.

That being said, while the aim is that you’ll go to pull out your Zilch card to pay instead of your Starling or Monzo, they want to make sure they really deserve it — to reach a point where it doesn’t make sense for the customer not to use it.

“What we would like to see is that we actually don't mind if you don't pull out your Zilch card, but let our platform help subsidise that cost to you,” Belamant continued.

“Whether you pull out a Zilch card or a Monzo card or any other card, you should not be paying the full price you are today. And you should be taking credit, you should be getting more access to credit and at an affordable price. 

“And if we can help make that happen, even if you're taking out a competitor's product, well we think that's probably for the best.”

Ultimately, that seems to be what ASPN boils down to.

What's next?

While ASPN is a huge move for Zilch — creating “what could be a trillion-dollar-plus payments ad-marketplace” — the fintech is also continuing to look to new verticals.

Travel is a big one. Rather than saving up for your summer holiday, you could snag a deal in January and pay back in monthly instalments.

Subscriptions are another one. You could get all the discounts of paying up front, but use Zilch to still split the payments over the course of the year. You could even have your phone bill, Netflix subscription or unlimited Pret coffees count towards building your credit score.

Whatever it might be, it’ll always come back to creating customer value according to Belamant — if we can’t add five or 10 times value then we won’t do it”.