Can someone explain Sezzle's business model to me?

[GranteedEV]

I made a purchase a few weeks ago and took the Sezzle option out of sheer curiosity.

Instead of one big payment, it's four interest-free payments over six weeks billed directly to my CC. At no extra cost, but that splits it into three separate CC statements.

Cool, and I like that.

But I'm struggling to figure out how that would be profitable to Sezzle? Are they charging the retailer a service fee? If so, isn't the retailer losing money on the sale? Or does having Sezzle as an option actually increase sales volume?

[GGG]

What happens if your credit card declines the payment? Are there significant penalties? That might be enough to pay for the model.

I also wonder if Sezzle actually pays the retailer in the same terms so they only carry non payment risk and not cash costs.

You are probably right though that Sezzle probably gets more than the 2-3% taken by Visa.

[Fuzz]

Whenever a purchase is made, Sezzle collects the first 25 percent from the consumer, but already pays out the full sales price to the merchant.


Sezzle then charges the merchant with a transaction fee that is equal to 6 percent plus $0.30 per transaction.

https://productmint.com/sezzle-busin...le-make-money/

[Flames0910]

Originally Posted by GranteedEV

I made a purchase a few weeks ago and took the Sezzle option out of sheer curiosity.

Instead of one big payment, it's four interest-free payments over six weeks billed directly to my CC. At no extra cost, but that splits it into three separate CC statements.

Cool, and I like that.

But I'm struggling to figure out how that would be profitable to Sezzle? Are they charging the retailer a service fee? If so, isn't the retailer losing money on the sale? Or does having Sezzle as an option actually increase sales volume?

Fuzz's comment makes it look like Sezzle is different, but typically what happens with these payment schemes is the payment provider offers an initial interest free payment period to show the benefit (increased sales) to the retailer. After the promotional period the retailer can then decide to either pick up the tab in order to maintain the additional sales or pass it on to customers.

[dammage79]

Whatever the business model. They're gonna put predatory schmuck likes easyhome out of business.

[you&me]

Originally Posted by Fuzz

https://productmint.com/sezzle-busin...le-make-money/

I've always found Productmint to be fascinating.

Essentially Sezzle gets a commission for facilitating a sale for the merchent. The merchant operates on the assumption the purchaser wouldn't otherwise buy their product without the financing from Sezzle. It's almost like a lead-gen service...

[ben voyonsdonc]

Originally Posted by Fuzz

https://productmint.com/sezzle-busin...le-make-money/

That sounds really expensive for the retailer in comparison to the credit card fees. I can see that you could argue that people would buy stuff using Sezzle that they wouldn't if it couldn't be done in installments but it sounds costly.

[ben voyonsdonc]

And the name will always remind me of this guy:

Spoiler!

[Fuzz]

Originally Posted by ben voyonsdonc

That sounds really expensive for the retailer in comparison to the credit card fees. I can see that you could argue that people would buy stuff using Sezzle that they wouldn't if it couldn't be done in installments but it sounds costly.

I guess it depends what you are selling. Losing an extra 4% but getting extra sales might be worth it. And you only lose that extra 4% on the Sezzle sales. So some sales are better than none, unless you have really tight margins.

[cam_wmh]

Originally Posted by ben voyonsdonc

And the name will always remind me of this guy:

Spoiler!

Oh man PZ was class, but boy did Brian Burke ever do him dirty.

[TorqueDog]

6%, and I thought American Express was steep for Merchant fees.