Zip Co Fuels Growth with New Relic Observability Benefits

Zip Co is an Australian leader in BNPL (buy now, pay later) payment solutions and operate online, in-store as well as via an app. Founded in 2013 and headquartered in Sydney, Australia, Zip Co has nearly two million customers, is available at more than 20,000 retailers, and is listed on the Australian stock exchange.

Zip has always been an innovative company, staying ahead of the curve. It has enjoyed years of fast growth, adding hundreds of thousands of customers and doubling revenue year-on-year. As the BNPL industry in which Zip operates is still relatively new to the financial services space, growth opportunities both domestically and abroad are significant.

Zip Co differentiates itself from its competitors by offering a digital line of credit via a digital wallet and as such, are able to support consumers for multiple purchases of varying ticket sizes. This point of difference placed Zip Co in a fantastic position to meet the unforeseen growth that the business experienced during the height of the Covid-19 pandemic in Australia. In the January to March 2020 quarter, Zip experienced a record 96% year-on-year growth, and in March, saw a 30% spike in overall customer spend and transaction volumes as customers shifted spend from fashion categories to essential services such as groceries and bill payments.

Even before the pandemic hit, Zip was growing at a phenomenal rate, and with this increase in demand came the need to build bigger systems and teams. Zip needed to ensure optimal performance and maximise uptime across its infrastructure to maintain its competitive edge.

Prior to New Relic, Zip were using several different tools and services to monitor performance, however these tools didn’t give them the level of visibility and alerting that they needed.

"We didn’t have the right monitoring or the right alerting, so we didn’t necessarily know straight away when there was a problem. We didn’t have a tool to tell us that there was a problem in the database or on a server. Without that kind of information it took us a lot longer to find out where the issues were," explains David Turner, Head Of Engineering, Zip Co.

Although there are key calendar dates such as Boxing Day and Cyber Weekend where Zip anticipates a sharp spike in transactions, there are other events that are less predictable. Any downtime can have significant impacts on Zip’s merchants during these peak periods, resulting in millions of dollars of lost revenue.

To ensure that Zip’s infrastructure is consistently performing at its best, David needed a platform that gave him and his team everything they needed in the one place.

“We were looking to improve our alerting, monitoring, and detailed error metrics together with measuring uptime”

New Relic was able to deliver all these features, saving Zip from having to deploy several different tools. It was very easy to deploy - "pretty much plug-and-play" - as well as easy to integrate with Zip’s systems, he explains.

Since deploying New Relic, Zip has seen a number of benefits. One of the key features has been root cause analysis: it previously took the team up to half an hour to diagnose a problem, now it takes minutes. 

"We can look really quickly, see where the problem is, and jump straight on it. It’s not necessarily an engineer who has to look into the issue, or the person who wrote the code. A product manager could jump in there and start to see where the problems are. This also gives them insight into issues and what needs to be addressed," David says.

With key events like Cyber Weekend (Black Friday and Cyber Monday) resulting in significant traffic, the appetite for error at Zip is exceptionally low. To prepare for these events, Zip carries out performance testing and incident simulations ahead of time. They use New Relic heavily for this, with distributed tracing to narrow down any bottlenecks. Cyber Weekend in 2019 resulted in over 850,000 sales transactions totalling $44m with only one incident which was pinpointed and resolved in minutes.

Another challenging day is Boxing Day which in 2019, was their busiest day. Being a public holiday, it’s also a day when many staff members are on leave. "In those scenarios we rely heavily on New Relic’s alerting,” says David.

Overall, New Relic has significantly reduced downtime and given Zip “a lot more visibility in downtime”, he says. This has enabled the company to measure and compare it month-on-month to look at ways for further improvement. 

Zip also uses New Relic dashboards to monitor its SLAs with customers and has found New Relic’s AI capabilities vital.

"Sometimes we don't know the traffic and we don't necessarily know what we should be alerting on. Setting it manually can lead to false positives … so the AI functionality, where it will alert based on what the system detects as an anomaly, has been really useful," David explains.

Zip has moved to microservices, a journey which New Relic has helped with, David says. Zip recently moved to Kubernetes in just three months, building a couple of APIs to support a new customer. New Relic was instrumented with CI/CD so every time the team built anything, it was automatically set up as part of its engineering practices of getting an API or microservice live. This enabled Zip to build things "more safely and with more visibility," explains David.

Now that Zip has demonstrated the value that New Relic brings to their business, there’s no turning back. 

"If anyone is having an issue, I can quickly pinpoint where the problem is,” says David. “New Relic gives me a full view of all our systems, and I don’t think I could manage without it now. Once you see the value New Relic delivers, you can’t not have it. It gives that level of confidence like no other solution."