> ## Content Index > Fetch the complete content index at: https://entrepreneurplus.co.uk/llms.txt > Use this file to discover other available public pages before exploring further. # How Does Zilch Make Money? The Ad-Subsidised BNPL Model - URL: https://entrepreneurplus.co.uk/how-does-zilch-make-money-the-ad-subsidised-bnpl-model/ - Published: 2026-08-21T11:21:26.000Z - Updated: 2026-08-21T11:21:26.000Z - Description: How does Zilch make money without charging customers in the traditional way? Its ad-subsidised payments model turns merchant fees, commissions and advertising into a growing revenue engine - reshaping how BNPL can work. - Author: Editorial Desk - Tags: Founder Stories --- Zilch doesn't charge interest or late-payment penalties. Some Zilch payment options can, however, carry upfront or transaction fees. So **how does Zilch make money** at all? The answer sits largely with retailers and the broader payments ecosystem, not with interest charges. --- ### The ad-subsidised model Zilch **makes money through** a combination of merchant commissions, performance-based advertising fees and other transaction-related revenue, rather than interest or late-payment charges on consumers. The company brands this as an "Ad-Subsidised Payments Network" (ASPN). Retailers pay for placement, pay commission on completed sales, and pay for advertising inside the app and Zilch uses that revenue to subsidise credit, cashback, and rewards for its 5 million-plus UK customers. In simple terms, the model has three important revenue components: - **Merchant commissions:** Zilch earns a commission when customers make purchases through participating merchants. - **Advertising fees:** Merchants can pay for premium placement and performance-based advertising within Zilch's network. - **Transaction-related revenue:** Zilch also earns revenue from transactions and its payment products, meaning advertising is an important part of the model but not the company's only source of revenue. Founder and CEO Philip Belamant has described the idea as doing for payments what Google did for search: give the product away free, and get paid by the businesses competing for the customer's attention instead. It's a genuinely different answer to **how does Zilch make money** compared with much of the BNPL sector, where merchant integration fees at checkout are a standard revenue lever. Zilch's own FY2025 annual report puts a number on how well the model scales: gross profit margin hit 49%, up from 39% the year before. --- ### How the ASPN model differs from Klarna/Clearpay Zilch differs from Klarna and Clearpay because its model is not dependent on a retailer integrating a Zilch checkout button for every transaction. Zilch offers a virtual Visa card that can be used wherever Visa is accepted, subject to the applicable product and transaction terms. For anyone asking **how does Zilch work**, the important distinction is that its payment and advertising network allows the company to interact with customers and merchants beyond a conventional BNPL checkout button. That distinction reshapes the commercial relationship. Klarna and Clearpay have historically built significant parts of their businesses around retailer integrations and checkout products, while Zilch can earn through merchant commission and advertising spend inside its own app. That is what makes the ad-subsidised model work at scale. There's a **consumer-facing difference too**, and it matters for anyone comparing Zilch fees against the rest of the market. Zilch does not charge interest or late-payment penalties, but some payment options can carry upfront or transaction fees. Miss a payment and Zilch may pause the account rather than imposing a late fee, though missed payments can still be reported to a credit reference agency. Understanding **how Zilch works** also explains why the company can offer different payment options rather than relying entirely on interest charges. From July 2026, qualifying UK Deferred Payment Credit products came under FCA regulation. --- ### Merchant commissions and advertising fees explained Merchants pay Zilch through a mix of commission on completed sales and performance-based advertising fees for premium placement in the app, and the FY2025 numbers show just how lucrative that mix has become. **Zilch's revenue take rate, the** share of transaction value it earns, rose to 6.08% in the year to March 2025, up from 5.44% the year before, as merchants paid more for affiliate commission and visibility. When Zilch opened ASPN to third-party partners in 2023, it disclosed that its top 30 merchant partners alone generated a combined $700 billion in annual revenue and paid Zilch an average commission north of 6% on every purchase made through the platform. This merchant-side commission is an important engine of the business, and it's a key part of the answer to **how does Zilch make money** at scale. The company also points to conversion as the reason retailers keep paying: ASPN reportedly converts at up to 55%, more than ten times the average for standard digital advertising, with Amazon and eBay listings converting at around 59% and food and drink brands closer to 70%. Return rates, Zilch says, average just 7% against a typical ecommerce range of 20–30%. These are Zilch's own figures rather than independently audited numbers, but they help explain why the balance keeps tilting further towards advertising and further away from pure lending. **Zilch's FY2025 numbers at a glance:** | Metric | FY2025 figure | Change on FY2024 | | ----------------------- | ------------- | ---------------- | | Gross profit margin | 49% | up from 39% | | Revenue take rate | 6.08% | up from 5.44% | | Revenue | £110.3m | up 93% | | Gross Merchandise Value | £1.9bn | up 73% | | Net loss | £10.5m | down 79% | --- ### Growth and profitability trajectory Zilch turned its first month of operating profit in July 2024, and by the year ending March 2025 the business had reported a sharply reduced full-year loss. Revenue climbed 93% to £110.3m and net losses were cut 79% to £10.5m, while Gross Merchandise Value the total value of purchases running through the platform rose 73% to £1.9bn. Monthly GMV exceeded £200m for the first time in 2024. The FY2025 numbers show three important changes in the economics of the business: - **Revenue scaled faster than costs:** revenue rose 93%, while administrative expenses increased only 7%. - **Margins improved:** gross profit margin reached 49%, compared with 39% in FY2024. - **Losses narrowed sharply:** the net loss fell 79% to £10.5m. The numbers also show **how Zilch makes money at scale**: transaction volume is growing while the company captures more revenue from the activity running through its platform. Zilch had more than 5 million customers, with the average customer spending £2,369 a year through the app, up 27% on the year before. Backing all of this is a £150m debt securitisation facility agreed with Deutsche Bank in 2024, with the structure underpinning approximately £3bn of annual origination volume, the kind of institutional credit facility that supports Zilch's ability to scale its lending operations. --- ### Regulation and FCA authorisation Yes, **Zilch is FCA regulated**, and has been since 2020 years before most of the BNPL sector was required to be. For anyone asking **i**s Zilch legit, the more meaningful evidence is its FCA authorisation and payments licence rather than customer-review scores. Zilch entered the FCA's Regulatory Sandbox to trial its consumer credit product that year, and in December 2025 it went further, securing a full FCA payments services licence that lets it build payment infrastructure in-house rather than lean on third-party providers, alongside becoming a Principal Member of Visa. That head start matters because the regulatory gap narrowed on 15 July 2026\. From that date, qualifying **UK BNPL products**, formally classified as Deferred Payment Credit (DPC), came under FCA regulation, including requirements around affordability, clearer repayment disclosures and access to the Financial Ombudsman Service. That also helps answer the practical question of Zilch legit: consumers are dealing with an FCA-regulated financial services provider rather than an unregulated BNPL operation. ![](https://storage.ghost.io/c/05/a4/05a4a052-18ab-4836-8924-ec8b322c371c/content/images/2026/08/How-does-Zilch-work.png.png) How Zilch payments work ### **FAQs** **1\. Is Zilch legit and FCA regulated?** Zilch has held FCA consumer credit authorisation since 2020 and secured a full FCA payments services licence in December 2025, alongside becoming a Principal Member of Visa. On Trustpilot, Zilch currently holds a 4.4 out of 5 TrustScore from more than 80,000 reviews, with 83% of reviewers giving five stars. That provides an indication of customer sentiment, while FCA authorisation is the relevant evidence of its regulatory status. **2\. What's the difference between Zilch and Klarna?** The core difference is reach and revenue. Zilch offers a virtual Visa card that can be used wherever Visa is accepted, subject to the applicable product terms, while Klarna and Clearpay have historically relied heavily on retailer integrations and checkout products. Zilch takes merchant commission and in-app advertising revenue rather than relying solely on traditional checkout fees, and it does not charge late-payment penalties. **3\. How does Zilch work?** If you're wondering how does Zilch work, Zilch gives customers access to flexible payment options through its app and virtual Visa card. Depending on the product and transaction, customers can spread payments over time while Zilch earns revenue through merchant commissions, advertising, transaction-related revenue and other payment-product fees. The company's ad-subsidised model allows merchant revenue to help offset the cost of providing credit and customer rewards. **4\. What do Zilch reviews say about the app?** Zilch reviews are largely positive, with a Trustpilot score of around 4.4 out of 5 from more than 80,000 ratings and 83% of reviewers giving five stars. The recurring praise is ease of use and the no-interest, no-late-fee structure; the recurring criticism, echoed across several independent reviews, is slower customer service response times on account issues. ***Also read:*** [*How to Trademark a Name and Protect IP in the UK*](https://entrepreneurplus.co.uk/how-to-trademark-a-name-and-protect-ip-in-the-uk/) --- ***Sources:*** Figures drawn from Zilch's FY2025 Annual Report and Financial Statements (year to March 2025) as reported by FinTech Magazine, Zilch's own press releases and Help Centre, the Financial Conduct Authority (FCA), and Trustpilot. Figures reflect the most recent available data at the time of writing. ***The EP+ Editorial Desk covers UK startups, founder stories, and venture capital. All editorial content is independently produced and human-reviewed before publication.*** ##