Zip Co shares have surged on its expansion into the United States, after the lender announced the $400 million acquisition of New York-based buy now, pay later player QuadPay in an all-scrip deal that will boost its customers to 3.5 million.

The deal, initially revealed by Street Talk on Sunday night, will allow Zip to chase Afterpay in the high-growth US market, where consumers are turning to interest free, instalment payments as an alternative to paying with credit cards, and the providers are in a land grab to acquire retailers to offer the products.