Highlights

• Zip Co (ASX: ZIP) rose 6.25% to $3.06 as fintech sentiment rebounded.

• The buy-now-pay-later and payments company has been driving major growth in its US business.

• The move came as the Information Technology sector (XIJ) led the market, up 3.36%.

• A risk-on EOFY reset day saw a rotation back into growth, tech and healthcare.

• The S&P/ASX 200 (XJO) added 0.22% to 8,783.70 on the session.

• Improving fintech sentiment raised the question of whether momentum is returning to ASX payments.

After a turbulent few years, the buy-now-pay-later sector has learned to take nothing for granted — which makes a day like 29 June 2026 all the more welcome for its investors. Zip Co (ASX: ZIP) rallied 6.25% to $3.06 (at the time of writing on 29 June) as fintech sentiment rebounded and growth buyers returned in force, prompting a question that has been simmering across the market: is momentum finally returning to ASX payments?

This article examines what powered Zip's rally, the buy-now-pay-later and payments business at the heart of the story, and the opportunities and risks investors should weigh as they consider whether the rebound in fintech sentiment has staying power.

Why This Stock or Index Is in Focus

Zip is in focus because it sits at the centre of the question investors are asking about ASX payments: has the sector turned a corner? As one of the highest-profile buy-now-pay-later and payments companies on the local market, Zip is a bellwether for fintech sentiment, and its 6.25% rally on a risk-on day was read by many as a sign that appetite for the sector is improving.

The rebound in fintech sentiment was the immediate catalyst. After a period in which buy-now-pay-later stocks endured significant volatility and scepticism, an improving mood toward fintech — set against a broad rotation back into growth and tech — gave names like Zip room to run.

The US growth story adds a crucial dimension. Zip has been driving major growth in its US business, and that international expansion is central to the company's narrative. When investors are willing to look again at fintech, a company with a credible US growth engine becomes especially attractive. The combination of improving sentiment, a supportive market backdrop and a tangible growth story explains why ZIP was a name worth watching on the day.

Key Drivers Behind the Move

The primary driver was the rebound in fintech sentiment combined with the broader return of risk appetite. With the IT sector up 3.36% and growth back in favour, buy-now-pay-later and payments stocks found support, and Zip — as one of the sector's flagship names — captured an outsized share of the renewed enthusiasm. Sentiment is a powerful force for fintech stocks, and an improving mood toward the sector provided a strong tailwind.

The second driver is Zip's US growth story. The company has been driving major growth in its US business, and that international expansion is central to the investment case. When investors are willing to re-engage with fintech, a company with a credible and growing US presence becomes especially appealing, because it offers exposure to a large market and a tangible avenue for scale.

A third driver is the broader narrative around whether momentum is returning to ASX payments. Zip's rally fed into that story, and as a bellwether for the sector, its move attracted attention from investors weighing whether the worst of the fintech downturn is behind them. Finally, the risk-on tone of the session, amplified by the EOFY reset dynamic, provided a supportive environment for a stock with an improving narrative. The combination of better sentiment, a US growth engine and a constructive market backdrop produced a decisive move higher.

Sector or Company Background

Zip Co is one of Australia's best-known fintech companies, operating in the buy-now-pay-later and broader payments space. Its core proposition allows consumers to make purchases and spread the cost over time, a model that gained enormous popularity and helped define a new category of consumer finance. Zip has grown into a recognisable brand both in Australia and internationally, establishing itself as a prominent player in the digital payments landscape.

A defining feature of Zip's strategy is its international expansion, with the United States emerging as a major growth engine. Driving major growth in its US business has been central to the company's narrative, giving it exposure to one of the world's largest consumer markets and a substantial runway for scale. This US focus reflects a broader ambition to build a global payments business rather than remaining solely an Australian operator.

The buy-now-pay-later sector has experienced a notable journey, from rapid growth and investor enthusiasm to a period of heightened scepticism and volatility as the market grappled with questions around profitability, regulation and competition. Companies in the space, including Zip, have had to navigate evolving conditions, sharpen their focus on sustainable growth and demonstrate a path toward stronger financial performance. Within the ASX technology and fintech landscape, Zip stands out as a barometer for sentiment toward payments stocks — when the sector is in favour, Zip tends to be among the names that move, and when scepticism returns, it feels that too. That bellwether status is precisely why its rally raised the broader question of whether momentum is returning to ASX payments.

What Investors Are Watching

With sentiment driving much of the day's move, investors will look for the fundamentals to support it. The trajectory of Zip's US business is the central focus — specifically how the company continues to grow its US presence and convert that growth into improving financial performance. Sustained momentum in the US is the key pillar of the long-term story.

Investors will also watch Zip's progress on profitability and financial discipline. After a period in which the buy-now-pay-later sector faced scrutiny over its economics, demonstrating a clear path toward sustainable, profitable growth is essential to converting renewed sentiment into a durable re-rating. Metrics around transaction volumes, customer growth, credit performance and margins will all be scrutinised.

The broader question of whether momentum is returning to ASX payments is the other major watchpoint. A sustained rebound in fintech sentiment, supported by a constructive growth-and-tech backdrop, would provide a favourable environment for ZIP, whereas renewed scepticism or a pullback in risk appetite could reintroduce volatility. Regulatory developments in the buy-now-pay-later space remain relevant too. For now, the combination of improving sentiment and a US growth engine keeps Zip firmly in the spotlight.

Risks and Watchpoints

Investors should balance the optimism with a clear-eyed view of the risks. The buy-now-pay-later sector has been notably volatile, and Zip's share price can move sharply in both directions as sentiment shifts. A rally driven substantially by improving sentiment can reverse if that mood fades, and fintech stocks can experience pronounced pullbacks as readily as sharp rallies.

Profitability and credit risk are central considerations. Buy-now-pay-later businesses are exposed to consumer credit dynamics, and factors such as bad debts, funding costs and the broader economic environment can influence performance. The sector has faced ongoing questions about the sustainability of its economics, and any disappointment on the path to profitability could weigh on sentiment.

Regulatory risk is significant. The buy-now-pay-later space has attracted regulatory attention in multiple jurisdictions, and changes to the rules governing the sector could affect business models and growth. Competitive risk is also relevant, as the payments landscape is crowded and dynamic. Zip's US focus introduces exposure to US economic conditions and currency movements, which can affect results translated into Australian dollars. Finally, the risk-on backdrop that lifted the stock is not guaranteed to persist, and a change in market mood could pressure fintech and growth names broadly. None of this is advice — it is the balance of considerations any investor should weigh.

Long-Term Outlook

The long-term case for Zip rests on its position as a prominent fintech with a growing US business and a recognisable brand in the payments space. If the company can continue to scale its US operations, sharpen its focus on sustainable and profitable growth, and navigate the regulatory and competitive landscape effectively, it has the potential to build a more durable business and reward patient investors over time.

The US growth engine is central to that vision. Exposure to one of the world's largest consumer markets gives Zip a substantial runway, and success there would be a powerful validation of its global ambitions. Combined with the lessons the sector has learned about discipline and economics, a more mature and focused Zip could be better positioned than it was during the more speculative phase of the buy-now-pay-later boom.

The measured view, however, is that the journey will involve volatility. Fintech is sensitive to sentiment, credit conditions and regulation, and the share price is likely to move sharply in both directions as the story unfolds. Whether the rebound in fintech sentiment marks a genuine turning point for ASX payments, or simply a risk-on bounce, will depend on consistent execution and improving financial performance. For now, Zip has reignited the conversation about whether momentum is returning to the sector — and reaffirmed its status as a key barometer for ASX fintech.

 

Is momentum returning to ASX payments?

Zip's rally, alongside an improving mood toward fintech, raised that question. As a bellwether for the sector, Zip's move suggested sentiment is improving, though whether it marks a genuine turning point will depend on sustained execution and financial performance.