Zip Brings BNPL to Every Best Buy: Should Your Store Offer It?

Zip now offers buy now pay later in store at every Best Buy. See what in-store installments cost merchants, how setup works and when the fee pays off.

Adrian ReyesSenior Payments & Fintech Editor

October 27, 2026 · 8 min read

Smiling woman in a blue dress holding a glass talks with two men in gray suits in a bright, modern office lobby

Photo: Pixabay

On this page 7 sections

What Zip and Best Buy Announced on Oct. 26
Why BNPL Is Moving From Online Checkout to the Register
How Buy Now Pay Later in Store Works: Three Setup Paths
What It Costs: BNPL Merchant Fees Compared With Card Processing
Which Stores Benefit Most: Big Tickets, Emergency Buys and Repairs
Returns, Refunds and Disputes on Installment Purchases
How to Add In-Store Installments Through Your Processor or POS

Key takeaways

Zip's in-store product runs on a one-time Visa virtual card. If your store takes mobile wallets, you can probably accept Zip installments now at your normal card rate, with no Zip contract.
A direct BNPL integration pays off only if enough of its buyers are new business. With the illustrative numbers here, that means about one in 10.
Refund Zip purchases to the Zip virtual card. A refund to cash or another card leaves the shopper still owing Zip.
Shoppers pay Zip an origination fee ($4 to $7.50 on pay-in-4 at Best Buy), so staff should never call it free.

Zip said on Oct. 26, 2026, that it is expanding its Best Buy partnership to stores nationwide, so eligible shoppers can now pay in installments at Best Buy registers through the Zip app. For an independent store, offering buy now pay later in store is worth a higher merchant fee only when it closes big-ticket sales you would otherwise lose. Many owners miss one detail: Zip's in-store product runs on a Visa virtual card. If your terminal accepts Apple Pay or Google Pay, Zip shoppers can probably pay you in installments today, at your regular card rate, with no contract between you and Zip.

So the real decision is narrower: whether a direct BNPL integration, with its own merchant fee, sells enough extra to beat the installments already running on your card rails.

What Zip and Best Buy Announced on Oct. 26

Zip Co (ASX: ZIP) announced the expansion in a Business Wire release dated Oct. 26, 2026. Best Buy already listed Zip as a payment option on its website and app. The expansion brings the partnership into physical Best Buy locations across the country, where eligible customers tap to pay through the Zip app at the register.

Zip reported that its U.S. in-store transaction volume grew 61% year over year in its fiscal first quarter of 2027 (Q1 FY27), and that in-store purchases climbed to 30% of its total U.S. transaction volume. It also cited more than 32,600 U.S. merchant partners and 4.7 million active U.S. customers.

On the shopper side, Best Buy's Zip page says eligible customers can split purchases into 4 or 8 installments with payments due every two weeks. Those plans carry an origination fee. Best Buy's help page puts it at $4 to $7.50 for pay-in-4 and $8 to $60 for pay-in-8, depending on the purchase price. Its disclosure example: a $400 purchase with a $7.50 origination fee becomes four payments of $101.88, which works out to a 32.66% APR. The financing is issued by WebBank.

Share that APR with your staff. Zip installments are not free to the shopper, and nobody on your floor should call them free.

Why BNPL Is Moving From Online Checkout to the Register

BNPL started as an online checkout button. The register was harder, because the lender has to approve and fund the purchase in seconds. Zip makes the credit decision inside its app and hands the shopper a card to pay with. It launched a physical Zip Card in the U.S. in October 2022, pitched for stores that don't take contactless or mobile wallet payments, alongside the virtual card in the app.

Zip's pitch centers on unplanned purchases. "Technology purchases aren't always planned," said Peter Volynsky, Zip US's chief commercial officer, pointing to the appliance that quits or the laptop that dies mid-semester.

One provider's growth doesn't prove your customers want installments, but Best Buy's national footprint will teach more shoppers to ask for them in person.

How Buy Now Pay Later in Store Works: Three Setup Paths

An installment purchase can reach your register in three ways, and they differ in who signs what and who pays.

App-generated virtual card. This is how Zip pay in store works. According to Zip's help center, the shopper opens the In-Store tab, reviews the installment summary and Truth in Lending disclosures, and receives a Zip virtual card to add to Apple Wallet or Google Pay. Zip says this works nearly anywhere Visa is accepted, for U.S. purchases only, with restrictions on certain merchants, products and services. If you don't take mobile wallets, the shopper can show the card number for manual entry or use the physical Zip Card. Your processor sees a Visa transaction, and you pay whatever your processing agreement charges for that card.

Direct merchant integration. Here you sign with a BNPL provider and add its option to your POS, terminal or checkout flow. The provider pays you the sale amount minus its merchant fee and carries the repayment risk. In return you can promote it and, with some providers, offer longer plans or promotional financing. This is the path where BNPL merchant fees apply. Our comparison of how Affirm, Klarna and Afterpay fit different stores covers the major providers.

Card-issuer installments. Some issuers let a cardholder split an ordinary card purchase into installments, either at checkout or afterward in their banking app. You run a normal card sale, and the plan lives between the shopper and their bank. Of the three versions of tap to pay installments, this one asks the least of you. For more on how card networks are treating installment transactions, see our explainer.

What It Costs: BNPL Merchant Fees Compared With Card Processing

	App virtual card (Zip in store)	Direct BNPL integration	Card-issuer installments
Contract with a BNPL provider	None	Yes	None
Your cost per sale	Your normal Visa card rate	The provider's merchant fee	Your normal card rate
Fee the shopper pays	Zip origination fee	Depends on provider and plan	Depends on the issuer's terms
How you get paid	Normal card settlement	Provider funds you under its agreement	Normal card settlement

Each provider sets its own direct BNPL fees. They are not Visa or Mastercard rules. They typically run higher than card processing and vary with plan length and with any 0% promotions you choose to fund. Get the provider's current rate card in writing before you compare anything.

A Break-Even Test for a $1,500 Sofa

Here is a way to decide whether a direct integration pays. All numbers below are illustrative assumptions, not any provider's actual pricing:

Sale price: $1,500
Gross margin: 40%, or $600 before payment costs
Card processing cost: 2.5%, or $37.50
Direct BNPL merchant fee: 6%, or $90
Fee gap between BNPL and card: $52.50 per sale

Shoppers who would have paid by card anyway cost you an extra $52.50 each. Shoppers who buy only because installments exist earn you $600 minus the $90 fee, or $510 each.

The break-even share of new buyers is $52.50 ÷ ($52.50 + $510), which comes to about 9.3%. Put plainly, if roughly one in every 10 BNPL buyers wouldn't have bought without it, the program pays for itself under these assumptions.

Ticket size doesn't appear in that formula; only the fee gap and margin do. It still matters because installments change buying decisions far more often on a $1,500 sofa than on a $40 sweater. On the app virtual-card path, the fee gap is zero in this model, so any extra sale is pure upside and the only question is whether to promote it.

Which Stores Benefit Most: Big Tickets, Emergency Buys and Repairs

Furniture stores fit the profile best. Purchases are large, often tied to a move, and shoppers compare total cost across stores. A pay-in-4 plan over six weeks handles a recliner more easily than a full dining set, so for bigger tickets look at providers' longer plans and weigh them against BNPL vs. layaway for your store. For custom pieces with long lead times, settle how deposits and installments interact before you sell. Our furniture store payment processing page covers hardware options.

Jewelers see high tickets with sharp peaks around the December holidays and Valentine's Day. Installments can move an engagement ring, but a sudden run of large card sales can also draw scrutiny from your processor's risk team. Our guide to jewelry merchant accounts built for high tickets explains how to head that off, and the jewelry and diamonds industry page covers account setup.

Apparel boutiques have smaller average tickets, so the lift from installments is usually smaller. Prom, wedding and holiday outfits are the exception. Boutiques also handle more returns, so the refund rules below matter more than the fee (see our apparel processing page).

Repairs and emergency replacements match Zip's own Best Buy pitch: the furnace part, the replacement phone, the brake job. A customer with an urgent need and a short budget is the clearest case of a sale that installments create rather than shift from another payment method.

Returns, Refunds and Disputes on Installment Purchases

Zip's refund rule trips up stores that don't know it. Its in-store FAQ, published on ShopRite's site, says returns must be refunded to the Zip virtual card used for the order. The shopper opens the order in the Zip app to show the associate the card details. If the store refunds to cash, store credit or a different card, Zip cannot process the refund, and the shopper still owes the remaining installments. That invites a dispute. Write "refund to original tender" into your policy and train every register on it. Our article on the refund policy requirements processors expect covers what to post, and this one explains whether you get processing fees back on a refund.

Disputes follow the payment path. A Zip virtual-card sale is a Visa transaction, so a dispute generally reaches you through your processor's normal chargeback process. With a direct integration, the provider's merchant agreement controls disputes, including whether it can pull back funds already paid to you. Keep itemized receipts and, for delivered goods, signed delivery confirmations.

Rules for BNPL lenders are also shifting at the state level. Our roundup of BNPL rules, including New York's new law tracks the changes. This is general information, not legal advice, so confirm obligations in your state with a qualified professional.

How to Add In-Store Installments Through Your Processor or POS

Test mobile wallet acceptance. Tap Apple Pay or Google Pay on your own terminal. If it works, the Zip virtual-card path already works too, unless your products fall under Zip's restrictions. If it doesn't, you need contactless-ready smart terminals or a newer POS.
Train the counter. Staff should refund installment purchases to the original card and never promise approval or call a plan "free." The lender's disclosures define the terms.
Run the break-even test with real numbers. Use your actual margin, your effective card rate and the provider's written merchant fee.
Ask your processor what your setup supports. BNPL options on the terminal depend on your hardware, POS software and gateway. Our guide to choosing a retail POS system lists the questions to ask.
Measure for 90 days. Track BNPL sale count and average ticket against card sales, and ask some installment buyers whether they would have bought without it. Their answers give you a rough new-buyer share for the formula above.

MannyPay sells Clover, Valor, Dejavoo and PAX hardware for retail payments. If you aren't sure your counter takes wallet taps, request a free quote and a MannyPay specialist will respond within one business day.

Start with step one this week, before the holiday rush. One tap tells you whether installment shoppers can already pay you. The question to watch after that is whether Best Buy's rollout teaches enough of your customers to ask for a BNPL brand by name that a direct listing becomes worth its fee.

Sources

About the author

Adrian Reyes

Adrian Reyes is Senior Payments & Fintech Editor for Beyond the Swipe, covering credit card processing, merchant accounts, payment technology and processing fees.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.