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  • Writer's pictureDonnelle Brooks

What is Sezzle? Everything you need to know

Since the launch of Afterpay and it's subsequent success, people have been rushing to get a piece of the pie. So, what is Sezzle all about, and what sets them apart? We pick apart the popular US Buy Now Pay Later service, and what makes it sizzle.. eh, Sezzle.



What is Sezzle?

Sezzle is a relatively new Buy Now Pay later service founded in the US in 2016. They are a payment method that allows you to break purchases into several instalments, similar to Afterpay. Despite raising money for their US operations in Australia, they do not currently offer their service to consumers here. They are therefore listed on the ASX asl SZL, due to being bought by Australian company Zip Pay, but can not be downloaded for use in Australia if you are a consumer. Booo!


Who owns Sezzle?

Sezzle was founded in 2016 by Charlie Youakim, Paul Paradis and Killian Brackey in Minneapolis, US. Sezzle is currently a publicly traded company listed on the Australian Securities Exchange (ASX) under the ticker symbol "SZL." Sezzle is a Buy Now, Pay Later (BNPL) platform that allows consumers to make purchases and pay for them over multiple installments. The ownership of Sezzle would be divided among its shareholders who hold its publicly traded shares on the ASX.


How Sezzle works

Sezzle is a Buy Now, Pay Later platform that allows shoppers to make purchases and pay for them in interest-free installments. With Sezzle, customers can shop online and choose the "Sezzle" option at checkout. Once the account is created or logged into, customers link their preferred payment method and are provided with a breakdown of the total purchase amount into four equal payments. The first installment is paid at the time of purchase, while the remaining payments are automatically deducted every two weeks. What Sezzle claims to set it apart from other BNPL platforms is its commitment to no hidden fees or interest charges. Customers only pay the actual cost of the items over time. It of course does have a late fee of $10, which we will go into more detail later.



How does Sezzle virtual card work?

Sezzle's virtual card operates as a digital payment solution that empowers users to make purchases online with added flexibility and convenience. When a customer selects Sezzle as their payment option during the checkout process on a participating merchant's website, Sezzle generates a virtual card that is tied to the specific transaction. This virtual card functions similarly to a traditional credit or debit card, but with a distinct advantage: it allows the customer to divide the purchase total into interest-free installment payments, typically spread over six weeks. Each installment is automatically charged to the user's chosen payment method every two weeks. The virtual card's integration with Sezzle's platform ensures seamless and secure transactions, while the installment feature grants consumers greater financial control and the ability to manage their budget more effectively. This innovative payment method combines the benefits of a virtual card with the flexibility of a Buy Now, Pay Later service, enhancing the shopping experience for users seeking a convenient way to manage their expenses.


How does Sezzle work for customers?

Sezzle offers customers a flexible and convenient way to make purchases by breaking down the total cost into multiple interest-free installments. When using Sezzle, customers can select the option to "Sezzle It" at the checkout of their favorite online retailers. They are then required to create a Sezzle account or log into their existing one. Once the account is set up, customers can link their preferred payment method, such as a debit or credit card, to their Sezzle account. The total purchase amount is divided into four equal payments, with the first payment due at the time of purchase. The remaining payments are scheduled to be automatically deducted every two weeks. Sezzle doesn't charge interest on these payments; instead, customers only pay the price of the product in manageable increments. This approach allows customers to enjoy their purchases without immediate financial strain and provides a responsible alternative to traditional credit options.


How to use Sezzle

To start using Sezzle, shop at your favorite online retailers and add your desired items to your cart. When you're ready to check out, select the "Sezzle" option as your payment method. If you're a first-time user, you'll need to create a Sezzle account, which involves providing some basic information. Once your account is set up, link your preferred payment method, such as a debit or credit card, to your Sezzle account. Sezzle will then break down the total cost of your purchase into four interest-free installments. You'll make the first payment at the time of purchase, and the remaining three payments will be automatically deducted every two weeks. There's no need to worry about interest or hidden fees – Sezzle provides a transparent and responsible way to manage your payments. Enjoy your purchases while spreading out the cost, all with the convenience of Sezzle.



How does Sezzle make money?

Sezzle generates revenue mostly through late fees and merchant fees. As a Buy Now, Pay Later platform, Sezzle charges merchants a fee for each transaction made by a customer using its service. This fee is typically a percentage of the total transaction value. Additionally, Sezzle may also earn income from late fees and interest charges if customers fail to make their installment payments on time. It's important to note that Sezzle's main source of revenue comes from the fees charged to merchants, allowing them to offer interest-free installment plans to customers, making it an appealing option for budget-conscious shoppers while providing a valuable sales channel for merchants.


When do Sezzle orders ship?

Sezzle orders typically ship in accordance with the retailer's shipping policies and timelines. Once you've completed your purchase using Sezzle at the checkout, the retailer will process your order and prepare it for shipping. Shipping times can vary depending on factors such as the retailer's location, the shipping method you choose, and any potential delays that might occur. It's recommended to refer to the specific retailer's shipping information, which is usually provided on their website or during the checkout process. By staying informed about the retailer's shipping procedures, you can better anticipate when your Sezzle order will be on its way to your doorstep.


When are Sezzle payments due?

Sezzle payments are typically due every two weeks. When you make a purchase using Sezzle, the total amount is divided into four equal payments. The first payment is due at the time of the purchase, and the remaining three payments are scheduled to be automatically deducted from your linked payment method every two weeks thereafter.


For example, if you make a purchase on a Monday, your second payment would be due two weeks later on the following Monday. The subsequent payments would follow the same pattern, occurring every two weeks on the same weekday as the original purchase.


It's important to keep track of these payment dates to ensure that you have sufficient funds in your linked payment method to cover the scheduled payments. Missing a payment could result in fees and potentially impact your ability to use Sezzle for future purchases. If you have any questions about your Sezzle payment schedule, you can refer to your Sezzle account or reach out to Sezzle's customer support for assistance.



Does Sezzle charge interest?

Sezzle does not charge traditional interest on its installment payments. When you use Sezzle to make a purchase, the total cost is divided into four equal payments. These payments are interest-free, meaning that you won't be charged additional interest fees for spreading out your payments over time.


However, it's important to note that Sezzle may charge late fees if a payment is missed or not made on time. Late fees can vary depending on the specific terms and conditions of your agreement with Sezzle and the regulations in your region.


While Sezzle itself does not apply interest to its installment payments, it's a good practice to review the terms and conditions of any financial service you use, including Sezzle, to understand all associated fees and policies.


What fees does Sezzle charge?

Sezzle may charge certain fees depending on your usage and any specific circumstances.


Late Fees

If you miss a payment or fail to make a payment on time, Sezzle may charge late fees. They avoid using the language late fee, and instead use, "reschedule fee", and these charges are $5 for every payment missed.


Reschedule Fees

If you need to reschedule a payment due date, Sezzle will charge a $5 reschedule fee for making this adjustment. This only applies if you have more than one reschedule per order. The first one is free.


Convenience Fees

Sezzle charges a convenience fee if you use a credit, debit, or prepaid card to pay off installments on an order. To avoid convenience fees, connect a bank account to pay installments.


Considering Sezzle claims to be transparent about fees, I had a lot of trouble finding out specific information about these fees listed above! I would urge caution before deciding to use Sezzle as a payment method.



Sezzle Merchant Fees

For merchants, Sezzle charges the following fees

  1. Order Processing Fee - A set percentage of each order and a small processing fee for all merchants

  2. Monthly Minimum Account Management Fee - A $15 monthly fee for merchants with less than $300 USD of order processing volume within a 30-day period

  3. Refund fee - for refunds issued using a credit / debit card on file


What shops use Sezzle?

Sezzle is a Buy Now, Pay Later service that partners with a variety of online retailers across different industries. Sezzle collaborates with numerous merchants in various categories, including fashion, beauty, electronics, home goods, and more. Some popular online stores that have partnered with Sezzle include:

  1. Fashion and Apparel: Brands like Fashion Nova, Boohoo, Missguided, and SHEIN often offer Sezzle as a payment option for shoppers.

  2. Beauty and Cosmetics: Retailers like Tarte Cosmetics, ColourPop, and Morphe Brushes are known to provide Sezzle as a payment choice.

  3. Electronics: Online electronics retailers such as Razer and GoPro have also been reported to offer Sezzle as a checkout option.

  4. Home Goods and Furniture: Brands like Wayfair, Overstock, and Ashley HomeStore might include Sezzle among their payment methods.

  5. Sports and Outdoor: Stores catering to sports and outdoor enthusiasts, like Dick's Sporting Goods and Academy Sports + Outdoors, may also partner with Sezzle.

  6. Jewelry and Accessories: Jewelry stores such as Pandora and Alex and Ani may offer Sezzle for customers looking to make affordable payments.

Keep in mind that the availability of Sezzle as a payment option can change, and new merchants may join the platform over time. To find out if a specific online store accepts Sezzle, you can visit the retailer's website and check the available payment methods during the checkout process. Additionally, you can visit Sezzle's official website or contact their customer support for an updated list of partnered merchants.



How does Sezzle compare to other Buy Now Pay later services?

Sezzle is one of several Buy Now, Pay Later (BNPL) services available in the market. While each BNPL service shares the fundamental concept of allowing customers to split payments into installments, there can be differences in terms of features, fees, availability, and user experience. Here's a comparison of Sezzle with other BNPL services:


Sezzle vs Klarna

Klarna is another popular BNPL option that offers the flexibility of paying in installments. Klarna partners with a wide range of merchants and provides various financing options, including interest-free installments and longer-term financing. Klarna often offers a "Pay in 30 Days" option, allowing customers to delay payment for their purchases.


Sezzle vs Afterpay

Afterpay is known for its four-installment payment model, similar to Sezzle. Afterpay allows customers to pay in four equal installments every two weeks. It's widely used among fashion and lifestyle retailers.


Sezzle vs Affirm

Affirm provides installment financing for online purchases, allowing customers to choose from various repayment plans. Affirm also offers longer-term financing options, and the APR (annual percentage rate) can vary based on the repayment plan chosen.


Sezzle vs QuadPay

QuadPay is another BNPL service that allows customers to split payments into four interest-free installments. It has a simple approval process and partners with various retailers.


When comparing BNPL services like Sezzle with others, it's important to consider factors such as:

Merchant Partnerships: Which retailers accept the BNPL service?

Payment Structure: How many installments are offered, and over what time frame?

Fees: Are there any fees, including late fees or upfront costs?

Availability: Is the service available in your country?

User Experience: How easy is it to use the service and manage payments?

Financial Impact: What is the APR or equivalent cost of financing if applicable?


Ultimately, the choice between Sezzle and other BNPL services depends on your personal preferences, the merchants you frequently shop with, and your financial situation. It's recommended to review the terms and conditions of each service, including any fees, before making a decision.



How often are Sezzle payments?

Sezzle payments are typically scheduled every two weeks. When you make a purchase using Sezzle, the total cost is divided into four equal payments. The first payment is due at the time of the purchase, and the remaining three payments are scheduled to be automatically deducted from your linked payment method every two weeks thereafter.


For example, if you make a purchase on a Monday, your second payment would be due two weeks later on the following Monday. The subsequent payments would follow the same pattern, occurring every two weeks on the same weekday as the original purchase.


It's important to keep track of these payment dates to ensure that you have sufficient funds in your linked payment method to cover the scheduled payments. Missing a payment could result in fees and potentially impact your ability to use Sezzle for future purchases. If you have any questions about your Sezzle payment schedule, you can refer to your Sezzle account or reach out to Sezzle's customer support for assistance.


What is Sezzle spending limit?

Sezzle's maximum spending limit is $2500. You may not be approved for this ful amount at first though. The inital limit will most likely be a few hundred dollars. Sezzle's spending limit for individual users can vary based on several factors, including your credit history, transaction history with Sezzle, and the policies of the specific retailer you're making a purchase from. Sezzle assesses each user's spending limit on a case-by-case basis to ensure responsible lending practices.


When you create a Sezzle account and start using the service, you might initially have a lower spending limit. As you build a positive repayment history with Sezzle, your spending limit may increase over time. This means that if you consistently make on-time payments and demonstrate responsible use of the service, Sezzle may grant you access to larger spending limits.


Does Sezzle check credit?

Yes, Sezzle conducts a soft credit check when you sign up for an account and use their service. However, this soft credit check does not impact your credit score and is not as extensive as a traditional credit check.

The purpose of the soft credit check is to verify your identity, assess your eligibility for Sezzle's services, and determine your initial spending limit. Sezzle takes into consideration various factors, including your credit history and payment behavior, to make a decision about your eligibility and spending limit.

It's important to note that while Sezzle does perform a soft credit check, they do not report your payment activity to credit bureaus. This means that your use of Sezzle, whether positive or negative, won't directly impact your credit score. However, late payments or outstanding balances with Sezzle could potentially result in restrictions on your Sezzle account or additional fees.



Is Sezzle online only?

Sezzle is primarily an online service that is designed to be used for online purchases. It's commonly integrated as a payment option on e-commerce websites, allowing customers to split their payments into installments when making online purchases.


However, Sezzle has expanded its services to some physical retail locations as well. Some brick-and-mortar stores have started offering Sezzle as a payment option at their physical point-of-sale (POS) terminals. This means that in select cases, you might be able to use Sezzle for in-person purchases at participating stores.


It's important to note that the availability of Sezzle as a payment option in physical stores can vary depending on the retailer and your location. The primary focus of Sezzle remains online purchases, where it's most commonly utilized.


The Bottom Line

Sezzle is a fairly good competitor to other BNPL services, and if used correctly can be a good budgeting tool. You know what's an even better budgeting tool? Budgeting! Learn about 4 types of budgets in this article. And try saving up for your big purchases instead of relying on credit. Your wallet will thank you. Not sure where to start? Read this article about how to start saving money. Happy shopping!


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