Zip Co Ltd (ASX:ZIP) has already had its recovery story. The harder part starts now.
The buy now, pay later group has spent the past two years proving it can grow without burning through the balance sheet. That shift is now visible in the numbers: Zip’s FY25 scorecard showed A$1.08 billion in total income, A$13.1 billion in transaction volume and A$170.3 million in cash EBTDA. Its 3Q FY26 update then pushed the story further, with record quarterly cash EBTDA of A$65.1 million and upgraded FY26 guidance to at least A$260 million.
That is the clean version of the story. The more interesting version is about where Zip wants to sit next.
On 16 June 2026, Zip said its US business would support Stripe’s Shared Payment Tokens, extending its instalment-payment product into AI-powered commerce and newer checkout experiences. That is not just another merchant announcement. It hints at a bigger ambition: Zip wants to be present before the customer even thinks of it as “using Zip.”
The recovery is no longer the only story
A few years ago, the market’s main question was simple: could Zip survive the BNPL shakeout?
The company is now being judged on a different test. Investors are looking at whether the US business can keep scaling, whether margins can hold, and whether the company can turn checkout visibility into repeat usage without letting credit losses creep higher.
Zip’s 3Q FY26 update gave supporters plenty to work with. Total transaction volume rose to A$4.0 billion, total income increased to A$335.2 million, and the US business grew faster than the group, with US transaction volume and revenue both up more than 43% year on year.
That US skew matters. Zip is no longer just an Australian BNPL operator with overseas optionality. It is increasingly a US growth story listed on the ASX.
The market has noticed. Zip’s investor page showed the share price at A$2.935 on 19 June 2026, after a sharp rerating from the lows of the last BNPL cycle.
Stripe puts the argument somewhere new
The Stripe announcement is interesting because it moves the conversation away from the old BNPL storefront model.
The old model was visible. A shopper reached the checkout, saw a Zip option, and chose whether to split payments. The newer model could be quieter. Shared payment tokens are designed to support payment experiences where credentials can travel more easily across digital commerce flows, including AI-assisted shopping.
In plain English, Zip is trying to move closer to the plumbing.
That does not guarantee usage, revenue or market share. It does suggest management is positioning the US business for a checkout world where the payment decision may be made inside apps, wallets, marketplaces or AI agents, rather than on a traditional merchant page.
The opportunity is clear enough. If Zip can stay embedded in high-volume payment flows, the company may have a wider path than standalone BNPL branding alone. The risk is just as clear: payments infrastructure is crowded, fast-moving and dominated by much larger players.
The numbers still have to do the talking
The case for Zip rests on operating leverage. Revenue and transaction volume are rising, while cash EBTDA is growing faster than both. That is the pattern investors usually want to see in a payments business after a cost reset.
But the bear-case pressure point has not disappeared. Credit quality still matters. Funding costs still matter. Consumer stress still matters. BNPL companies can look strongest late in a spending cycle, right before arrears begin to test the model.
That is why Zip’s net bad debts and cash net transaction margin deserve more attention than the headline growth rate. The FY25 scorecard showed net bad debts at 1.5% of TTV and cash net transaction margin at 3.9%. Those numbers are not decoration. They are the guardrails around the growth story.
The awkward question is whether Zip is now being priced as a cleaner payments compounder while still carrying some of the risks of a consumer-credit lender.
What the next update needs to prove
The next scheduled milestone is Zip’s FY26 results on 20 August 2026. By then, investors will have a better read on whether the 3Q momentum carried through the June half, and whether management’s upgraded cash EBTDA guidance was conservative or simply accurate.
Three things matter most from here.
First, the US business needs to keep growing without a visible weakening in credit metrics. Second, the Stripe and AI-commerce angle needs to turn from strategic language into measurable merchant or transaction contribution. Third, buybacks and capital returns need to be balanced against the investment required to keep the US engine moving.
Zip has moved past the survival chapter. That does not make the next chapter easier. It makes it more demanding.
The market is no longer asking whether Zip can recover. It is asking what kind of company Zip becomes after the recovery.
