In the modern age of endless tech startups, company names can come and go like leaves in the breeze without making any mark. You might not know what any of these companies do! However, other companies such as Sezzle may have made their mark on you.
Sezzle is a financial technology company that allows customers to utilize payment plans for selected, partnered online stores. By employing a "buy now, pay later" program, Sezzle helps finance purchases while maintaining their customer's budgets.
As with everything in the world of technology, it is more complicated than it seems. However, you may have been sold on Sezzle already just by hearing its features! If you would like to know more about this company and its nifty services, read on!
What Is Sezzle?
Founded in 2016, Sezzle is what technology and finance experts have referred to as a "BNPL Company," meaning that they utilize a "buy now, pay later" program to postpone payment on a customer's purchase.
"Buy now, pay later" programs are a form of financing, exclusively in a less-lengthy period than a mortgage, student loan, or a car payment.
Different BNPL companies will offer various installment plans and different interest rates, though Sezzle does away with interest, making them an ample option for more frugal consumers.
Sezzle is a large company with upwards of seven million users and forty-thousand partnered merchants. It operates mainly in the United States in Canada, with expansions into India and Brazil in 2020 and 2021, respectively.
Sezzle is a notably trusted name in the financial technology industry, achieving partnerships with major retail companies such as Target. Sezzle is the first BNPL company to partner with a major American retail company.
Sezzle is also a company that has adapted well to the changing technology landscape, being natively available on Android, iOS, and Windows operating systems.
How Does Sezzle Work?
The operation of Sezzle is simple- a customer downloads the Sezzle app or accesses the browser-based website, creates an account, and can make purchases!
Of course, any Sezzle user- regardless of being a customer or a partnered merchant- requires a verifiable email address and a phone number that can receive texts.
By partnering with over forty-thousand merchants and counting, including major retailers such as Target, Sezzle offers a wide variety of items for customers to purchase.
By splitting payments, Sezzle allows consumers to spend less money all at once, giving them more pocket change for their daily operations and aiding in budgeting.
How Does Sezzle Work For Merchants?
When it comes to merchants, Sezzle can be very easy to use. Merchants will sign up similarly to customers, with an email and phone number required.
Sezzle benefits merchants by providing a massive online customer base, with over seven million users able to access their products.
While Sezzle takes payments in installments from their customers, merchants are paid in full, meaning that they feel no penalties for the customer's benefit.
Sezzle's merchant dashboard is streamlined and simplified, making it easy for merchants to manage their businesses and online presence.
While Sezzle is mostly lauded by customers, over forty thousand merchants have accounts with the company, including major retailers such as Target and Bass Pro Shops.
Merchants seem to love Sezzle just as much as customers do!
How Does Sezzle Work For Customers?
Using Sezzle is extremely simple for customers. After making an account, simply make an eligible purchase with one of over forty thousand partnered merchants!
This purchase will be split up into four interest-free payments over six weeks, the first of which will be due immediately.
This rigid schedule is one of the few perceived downsides of Sezzle. Other BNPL companies may offer a more flexible schedule regarding payments, but Sezzle offsets this with their lack of interest rates.
As customers make more purchases and make their payments on time, they will be approved for higher limits, allowing for them to make payments on more expensive purchases.
Sezzle is notable for not exclusively relying on a customer's FICO score for approval, with each order being considered individually and assessing the customer's purchase history.
Additionally, Sezzle utilizes a system of soft checks for their customer's credit scores, meaning that applying for Sezzle does not negatively impact your credit score.
However, there is a way that Sezzle can positively impact your credit score, and that is its Sezzle Up program.
Sezzle Up is a program offered by Sezzle that allows credit bureaus to access your payment history, meaning that you can build your credit while also taking advantage of Sezzle's interest-free financing.
Of course, Sezzle Up is not immediately available to all Sezzle users. There are several prerequisites that users need to meet before they can opt into Sezzle Up.
First, Sezzle users need to pay off one order. This payment needs to be on time or early, but it only needs to be a single order!
Second, a Sezzle user must link their bank account or debit card to Sezzle as the default payment method for scheduled payments.
Third, Sezzle requires a user's personal information, including their social security number, name, and address.
When you have met all three of these requirements, you will be able to join the Sezzle Up program and give your credit score a boost.
Unfortunately, there are downsides to the Sezzle program. In the four countries in which Sezzle currently operates, only the United States has access to the Sezzle Up program.
This exclusivity is likely because the United States of America is the only country that currently utilizes a credit score system, making Sezzle Up redundant in outside countries.
Additionally, if you no longer wish to receive the Sezzle program's benefits, you must close your Sezzle account entirely; you are not able to opt-out of Sezzle Up.
You must weigh the benefits against the downsides, and if you are interested in building your credit, the Sezzle Up program may be a good choice for you.
Is Sezzle Safe?
Sezzle is just as safe as any other payment company, following the compliance standards set by the Payment Card Industry Security Standards Council, also known as the PCI.
PCI compliance is not required by law, meaning that any company that boasts PCI compliance has sought out the achievement of their own volition to ensure user safety.
Merchants who have already met compliance standards set by the PCI must renew their standing annually, meaning that companies like Sezzle are regularly state-of-the-art in terms of security.
PCI compliance is a significant bonus to security, as the organization's standards are notoriously rigorous.
PCI Compliance Standards
For merchants to achieve PCI compliance, they must store customer data behind a firewall and with encryption. Individually, these are both trustworthy security measures, but when combined, they can be notably ironclad.
Entities with PCI compliance, such as Sezzle, must also maintain state-of-the-art antivirus software and assign unique IDs to each user to track activity and ensure safety.
Annual re-assessments are not the only time that the PCI requires merchants to test and update their systems- quarterly scans and constant monitoring of traffic are vital requirements for compliance.
Digital security is not the only concern of the PCI- the organization requires that compliant merchants carefully monitor physical access to date, such as by placing security cameras in server rooms or important business areas.
PCI compliance also requires that merchants have individual methods to identify and address potential security vulnerabilities, whether they be digital or physical.
Additionally, most larger businesses are required to utilize third-party auditors in their assessments to make sure that the review is completed in a secure and unbiased manner.
With this much security and such tense requirements, you can see why so many people trust Sezzle with their transactions and financial data.
However, it is important to note that Sezzle has many of the same psychological effects as credit cards- namely, overspending.
While breaking up a purchase into many smaller payments can be great for budgeting, overuse can cause a customer to spend far more than they had initially intended.
Overall, it seems that Sezzle is a secure program with no major system issues- as long as you can reign in your spending.
Hopefully, you can tell just what Sezzle is by now- a program that allows you to buy now and pay later. This feature is perfect for consumers to make purchases right when they need to without putting too large of a dent in their bank account.
If you were on the fence about using Sezzle, you might be happy to know that Sezzle meets industry standards with its security. If you are comfortable with using a credit card, you should feel comfortable with using Sezzle!
Aside from being alike in functionality, credit cards and Sezzle are alike in security. Sezzle is a great company to use when financing purchases for both merchants and customers! It is truly a great tool to use when conducting business.
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.