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Embattled buy-now-pay-later group Zip Co (ASX: ZIP) is closing its money management app Pocketbook in the face of ‘significant changes’ to the company’s operating environment.
However, the fintech says it is hoping to introduce a similar product for its customers through its own corporate-branded app over the next year.
The app, acquired by Zip in 2016 for $7.5 million from Sydney-based founders Bosco Tan and Alvin Singh, has been operating for the past decade, amassing a reported 800,000 users who access a free budget planner and personal finance services through the app.
“Zip’s operating environment has changed significantly in the last few months and as a result we have adapted our strategy accordingly in order to accelerate our path to global profitability,” says Zip’s chief product officer Travis Tyler.
“With this in mind, Zip has decided to close the Pocketbook app in order to reprioritise resources and focus on delivering sustainable profitability in our core ANZ market.”
Zip says Pocketbook has helped ‘hundreds of thousands of Australians’ better view and manage their money over the past decade.
“We continue to have a passionate and active user base,” says Tyler.
“We are focusing the team on bringing to life similar experiences in our Zip app over the coming year and improving our core product experience as per the direction we have given to the market.”
“By focusing our people and investment on our Zip Pay and Zip Money experience we can deliver more value to our customers and merchants and further differentiate from competitors.”
The closure of Pocketbook comes as the BNPL sector faces challenging market conditions due to rising interest rates and an increase in bad debts. Zip’s shares have fallen more than 93 per cent in the past year.
Zip saw an 89 per cent increase in revenue through acquisition in the first half of FY22, although it still posted loss of $172.79 million. This was down from a $455.93 million loss a year earlier.
However, total cash on hand fell 19 per cent to $266.8 million for the six months to the end of December and the closure of Pocketbook is seen as part of a range of cash-preserving measures implemented by the parent company as its focus turns from expansion to belt tightening.
Pocketbook will cease operations on 5 August 2022. The app’s website says it will be deleting all personal information including email addresses, names and mobile numbers as well as financial account and transaction information.
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