What Is Sezzle & Should You Offer It At Checkout?
This popular buy now, pay later app may help improve sales and reduce cart abandonment for your online store, without affecting your cash flow negatively.
Buy now, pay later options are taking the eCommerce world by storm. They offer customers the flexibility of paying on their own schedules, reduce the amount they actually have to pay at the time of purchase, and can help people budget in purchases just like they do with things like utilities and subscriptions. For eCommerce business owners, offering the option to buy now and pay over time translates to higher average order amounts and a way to reduce shopping cart abandonment.
Sezzle is one of the highest-rated buy now, pay later apps out there right now. Keep reading this post to find out how Sezzle payment plans work for your customers, how to incorporate BNPL into your eCommerce business, and whether Sezzle is the BNPL app that meets all of your business’s needs.
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What Is Sezzle Payment?
Sezzle Payment is a buy now, pay later app that allows customers to make a purchase now, pay for 25% of the purchase at checkout, and pay off the rest in three biweekly payments. Merchants offering the BNPL option are paid up front, minus Sezzle’s merchant fees.
How Sezzle Works For Business
In general, BNPL is appealing to customers because it:
- Offers the perks of a credit card without having to pay a lot of interest
- Appears to be more transparent than credit cards, especially to younger buyers
- Helps shoppers budget for larger purchases
- Creates a way for shoppers who can’t afford to spend a huge chunk of money to still purchase what they want to
- Offers an added layer of flexibility for online shoppers, who are starting to expect the kind of tailor-made shopping experience that BNPL make possible for even the smallest eCommerce store owners
Sezzle, as well as other BNPL providers such as Affirm and Klarna, offers interest-free installment payment plans for shoppers who may not qualify or want to own a credit card, but still want all the benefits of paying off purchases over time.
How much can Sezzle influence consumer behavior? This March 2021 study about BNPL usage among the U.S. adult population can answer that question. The study, which was commissioned by Sezzle and carried out by Netfluential, showed that:
- 52% of consumers are more likely to make a purchase from a retailer that offers interest-free payment plans
- 73% of BNPL users say that they spend more when BNPL is available
- 64% of Sezzle users spent more than originally planned because Sezzle was available
- 16% of Sezzle users would not have made the purchase if Sezzle was not available
While customers pay off their purchases over time, merchants get paid upfront and in full, minus associated merchant fees. You receive payment for purchases whether customers repay their installment plan in full or not. Sezzle takes on all the financial risk of customer payment programs, while you get all the benefits of offering BNPL.
Sezzle has a unique value proposition that sets it apart from other BNPL providers. It is the only certified B Corp fintech in the BNPL space right now, because of the business’s commitment to financial education and empowerment for the next generation of shoppers. In alignment with this mission, Sezzle offers services that competing BNPL providers do not.
For example, Sezzle created the Sezzle Up program for customers who want to improve their credit scores. Sezzle gives participants a credit limit, and reports on-time repayments to major credit bureaus. Sezzle Up gives customers a low-stakes way to improve their scores so they can achieve their financial and life goals later on in life.
Considering the fact that 51% of BNPL users are interested in building their credit through BNPL instead of a credit card, offering a BNPL option with a credit building program could be very worth it.
Sezzle’s high level of transparency and customer service quality is unmatched by other BNPL providers, which is part of why it was named the #1 Installment Payment Software provider by G2 in Fall 2021. Sezzle makes the buy now, pay later process incredibly easy, and they work to build trust with their customers. This ultimately helps eCommerce shop owners convert more one-time buyers to lifelong customers.
Merchants can expect to pay a flat rate of $0.30 and a 6% commission on every purchase made through the BNPL app in merchant fees. If you’re not sure whether paying for buy now, pay later services really worth the cost, read our post, Adding Buy Now, Pay Later To Your Website: Does It Help Or Hurt Your Bottom Line?
How Does Sezzle Work For Customers?
As customers shop, they encounter Sezzle advertising on product pages, and they can choose Sezzle as a payment method at checkout. Here’s how the payment process works for your customers.
Step 1: Your customer enters all their shipping information and chooses Sezzle as a payment option at checkout.
Step 2: After making sure all their information is correct, your customer will be redirected to Sezzle to create a free account and complete their purchase. They will enter their legal first and last name, date of birth, a U.S. phone number, a working email address, and a pin number.
Step 3: Sezzle will send a text code your customer enters during signup to confirm their phone number.
Step 4: Your customer will be prompted to enter a payment method that Sezzle can charge installment payments to. Sezzle accepts credit and debit cards.
Step 5: After your customer enters their card information, Sezzle’s automated system runs a soft credit check, which is used to help determine whether Sezzle should approve or deny the loan amount. Soft credit checks do not impact your customer’s credit score.
Your customer may be denied their first loan if the purchase amount is too high, since Sezzle usually only gives out loans between $50 and $200 for first time users.
As your customer continues using the BNPL app and making payments on time, their spending limits will increase.
Step 6: Your customer, if approved for a loan, will see their payment schedule broken down on-screen. 25% of the purchase amount is due when your customer clicks “Complete Order”. They will be redirected back to your website, where they will see their confirmed order information.
Over the next six weeks, customers make their three remaining installment payments, one every two weeks. Sezzle automatically charges the payment method you have on file, but customers can change their installment payment date up to three times. They can reschedule a payment date once for free, but there is a $5 rescheduling fee for the next two rescheduled payment dates.
Rescheduling is available so that shoppers can avoid the $10 late payment fee for missed payments. Rescheduling can also help customers avoid nonsufficient fund charges from their bank, which can happen if Sezzle automatically charges a bank account that does not have enough funding to cover the installment payment.
- Related: PayPal has recently updated its BNPL policies so that its customers never pay late fees. Learn how PayPal Pay In 4 works and whether it’s the right BNPL provider for your customers.
How To Add Sezzle To Checkout
Step 1: Apply for a merchant account. Sezzle will not work with, or will have to explicitly approve activities for businesses that involve activities such as the selling of age restricted products or services, collecting nonprofit donations, or selling travel or experience products. If you’re unsure whether Sezzle will work with your business, contact their approvals team by submitting a request through Sezzle’s merchant support page.
Before you apply, make sure your website includes:
- Contact information
- Products available for purchase
- A working checkout solution
- Shipping and return policies
You will fill in information about your legal business name, the eCommerce platform you use, your estimated annual online and in-person sales, your shop’s average order value, and how long a customer can expect to wait to receive an order after placing it.
Someone from Sezzle will contact you within three business days about your application.
Step 2: Once you are approved for a merchant account, Sezzle sends new merchants a “Setup Checklist” with a thorough step-by-step guide for installation. The Setup Checklist includes everything from how to get Sezzle up and running on your website to setting up a bank account.
You can find the Setup Checklist in the email you used to apply for a merchant account, or in your Sezzle admin dashboard.
Step 3: Install Sezzle on your website. Sezzle has out-of-the-box installation plugins for eCommerce platforms such as Shopify, BigCommerce, WooCommerce, and Magneto. Within the Setup Checklist, there is a step-by-step plugin guide tailored to your eCommerce platform.
We’ll show you how to add Sezzle to a Shopify store below, but the installation process is similar across all eCommerce platforms.
Step 4: Add Sezzle widgets to your website.
Widgets are third-party applications embedded into your website’s code. They exist so that your customers can interact with Sezzle directly through your website. Sezzle widgets display the Sezzle payment breakdown on product and cart pages.
Sezzle has created pre-made widgets for some eCommerce platforms, such as Shopify and WooCommerce, that you just need to activate to show Sezzle on your store’s pages. If Sezzle does not have pre-made widgets for your eCommerce platform, or your website is built with no eCommerce builder, you will need to create a widget using an integration guide you can find on the Sezzle website.
Step 5: Activate Sezzle as a payment method on your website. The Setup Checklist will explain this step in detail.
Step 6: Once customers can pay for purchases through Sezzle, link your business bank account to your merchant account. That way, you can receive payouts from Sezzle. To do this from your Sezzle admin dashboard, go to “Settings”, then the “Bank Accounts” tab.
From there, click “Add A Bank Account” and enter your business’s banking information.
Within 1-2 business days, you will receive two micro-deposits in your business bank account. Once you receive them, go back to the “Bank Accounts” tab and click “Verify Account”. Enter in the two micro-deposit amounts, exactly as they are listed on your bank statement.
Finally, choose your currency settings.
Now you can start receiving payouts from Sezzle!
If you run into any issues with setup, submit a request for help. Sezzle provides great service to customers and merchants, so you can expect a prompt response from a great support team.
How To Add Sezzle To A Shopify Store
There are four parts involved in setting up Sezzle on a Shopify store: installing the Sezzle Shopify app, configuring Sezzle on your actual web pages (also known as adding widgets), adding Sezzle as a payment method at checkout, and adding brand assets to advertise Sezzle elsewhere on your store.
Adding branded messaging is optional, and is not as easy as the Sezzle installation process itself. Advertising this new payment method throughout your website and other marketing efforts will get site visitors familiar and excited about BNPL, though, so it could be worth this extra setup step.
To get started, you have to install the Sezzle Shopify app.
Step 1: Log onto your Shopify store Admin dashboard.
Step 2: In a new tab, go to your Sezzle merchant dashboard, where your setup checklist is located.
Step 3: From there, click “Download Shopify App”. Next, click “Get the App”. Then, click “Install the App”.
The next steps will tell you how to configure Sezzle widgets.
Step 4: Back in your Shopify admin dashboard, click on “Apps”. You should see Sezzle as an option. From there, enter your Public API key, which you can find back in your Sezzle merchant dashboard. Then, click “link Sezzle account”.
Step 5: After your account is verified, click “add widgets” to add widgets to your site.
After you have added widgets, go to any of your store’s product pages. If you see Sezzle’s four interest-free payments breakdown, you have successfully added Sezzle widgets to your site for customers to see.
These last steps will tell you how to install Sezzle as a payment gateway. This allows people to pay through Sezzle at checkout.
Step 6: From your Shopify store admin dashboard, click on “Settings”. After that, click on “Payments”.
Step 7: Scroll down to “Alternative payment methods” and click on “Choose alternative payment”.
Step 8: Locate your Sezzle API credentials and enter them into the “Account information” section. Then, click “Activate Sezzle.”
The entire installation process is complete at this stage.
To make sure checkout works on your website, make sure “Enable test mode” is unchecked. Then, go to your live site and add something to your cart. Next, go to your checkout page, and select Sezzle as the payment method. Click “Complete order” (or whatever wording you use on your Shopify buy buttons.)
If you are redirected to the Sezzle checkout page, you have successfully added Shopify to your store. Any of your customers can choose to buy now and pay later.
Adding Sezzle brand assets to a Shopify store is a little more complicated. It involves editing your Shopify theme code. There are detailed instructions on how to add brand assets to a Shopify store, but if you are not comfortable with a single line of code, consider hiring a Shopify expert to do it.
Don’t forget that Sezzle sends new merchants a checklist with step-by-step instructions on to add Sezzle to your Shopify store.
Should You Add Sezzle Payment To Your Shop?
Offering buy now, pay later options is an easy way to set yourself apart from your competitors. It’s also a way to get ahead of the curve, as online shoppers will grow to expect some form of installment plans at checkout.
Sezzle, in particular, serves up fantastic customer service for both Sezzle users and merchants. The company has a strong social mission, which resonates with its 3.2 million active users and 44,440 active merchants (as of September 2021.)
If your customer purchases are typically from $50 up to $2,500 and want to offer customers a straightforward BNPL option that your customers can trust, add Sezzle payment to your shop. If your shop mainly caters to younger shoppers, definitely advertise the financial education and credit-building aspects of Sezzle.
If you’re looking for a wider variety of BNPL options to offer your customers, different fee structures, or if you’re just curious about what other BNPL options are out there for merchants, read up on all the best BNPL apps to offer your customers.