Zip Co Ltd (ASX:Z1P) shares take off following Virgin Australia Holdings Ltd (ASX:VAH) deal

The Zip Co Ltd (ASX:Z1P) share price has taken off this morning after announcing a deal with Virgin Australia Holdings Ltd (ASX:VAH). Should you invest?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One of the best performers on the local market today has been the Zip Co Ltd (ASX: Z1P) share price.

In late morning trade the payment solutions company's shares are up almost 5% to 98 cents.

Why are Zip Co's shares taking off today?

This morning Zip Co announced that it has partnered with Virgin Australia Holdings Ltd (ASX: VAH) to offer its interest-free payments to the airline's travel customers.

This builds on a deal with Virgin subsidiary Tigerair that was announced in March and went live in the middle of April.

Zip CEO and managing director, Larry Diamond said: "We are thrilled to partner with Virgin Australia. We see a great fit between our brands and 'customer first' attitude. The Zip solution compliments (sic) the Virgin offering and will provide customers with payment choice. We look forward to delivering for Virgin Australia and their guests."

According to the release, the company feels the deal is in line with its strategic vision and expects it to result in a growing presence in the travel and leisure sector.

The integration process will commence in the coming months and could be a big boost to transaction volumes in FY 2019.

In FY 2018 transaction volume came in at $542.9 million, up 136% on the prior corresponding period. Management is aiming to almost double this again this year, targeting transaction volume of more than $1 billion in FY 2019.

As well as the Virgin deal, the company's transaction volumes should be given a lift from the recently announced arrival of Super Retail Group Ltd (ASX: SUL) brands onto the Zip platform.

Should you invest?

While they are certainly high risk investments, I think both Zip Co and rival Afterpay Touch Group Ltd (ASX: APT) have a lot going for them at the moment and could be worth a closer look.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Hands reaching high for a trophy with a sunset in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a cracking end to the trading week for ASX investors.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Share Gainers

Why ARB, Cleanaway, Hub24, and RPMGlobal shares are storming higher today

These shares are ending the week with a bang. But why?

Read more »

Five people in an office high five each other.
Technology Shares

5 best performing ASX 200 tech shares of FY25

Some of the technology sector's biggest names led the charge in share price growth last financial year.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

3 ASX shares that rose 100%+ in FY25

Let's see why these shares delivered huge returns for their shareholders in the last financial year.

Read more »

Silhouettes of nine people climbing a steep mountain to the top at sunset, and helping each other along the way.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a wild ride this Thursday.

Read more »

Excited couple celebrating success while looking at smartphone.
Share Gainers

Why Domino's, NRW, Pro Medicus, and WIA Gold shares are charging higher today

These shares are avoiding the market weakness and are pushing higher today. But why?

Read more »

Three scientists wearing white coats and blue gloves dance together in a lab.
Healthcare Shares

UP 127% in a year, why is the Pro Medicus share price rocketing higher again today?

ASX investors are sending Pro Medicus shares flying higher on Thursday. But why?

Read more »

Happy man working on his laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX roared higher this hump day.

Read more »