Buy Now, Pay Later, The Sezzle Way! How Sezzle Actually Makes Money!

It seems too good to be true, doesn’t it? You can buy what you want and pay for it later in four interest-free payments. But how does Sezzle make money? Surely they must be making a loss by giving out all of these interest-free loans?

The answer is no; Sezzle is making a profit! They are a company, after all, and companies need to make money to stay afloat. So how does Sezzle make its money? First of all, Sezzle charges merchants a fee for using their service. This fee is typically around 2.6% + 30c, which the merchant pays out of their profits. For example, if you buy something for $100 using Sezzle, the merchant will receive $97.40, and Sezzle will keep $2.60 as their fee.

In addition, Sezzle also charges customers a late fee if they don’t make their payments on time. These late fees are typically around $10 per week and go straight into Sezzle’s pockets.

So there you have it! Sezzle makes a profit by allowing people to buy now and pay later. So, how does Sezzle work?

How Sezzle Works

For Customers

Choose Sezzle at checkout: This stage is pretty simple. When you’re checking out an online store that offers Sezzle, select Sezzle as your payment method.

Get approved instantly: Once you’ve selected Sezzle, you’ll need to go through a quick verification process. This is so Sezzle can confirm your identity and ensure you’re eligible for their service.

Make your first payment: After you’ve been approved, you’ll need to make your first payment. This payment is typically around 25% of the total cost of the purchase, and it will be due two weeks after the purchase is made.

Receive your order: After you’ve made your first payment, Sezzle will pay the merchant on your behalf, and you’ll receive your order just like normal.

Make three interest-free payments: Over the next six weeks, you’ll need to make three additional payments. These payments are typically around $25 each when using the earlier example of $100 and are due every two weeks.

That’s it!: Once you’ve made your final payment, you’ll be done! Sezzle will automatically close your account, and you won’t need to worry about it anymore.

Sezzle is a great app for busy people that are looking for different methods to budget and purchase the things they need.

For Businesses

Apply to offer Sezzle: The first step for businesses is to apply to offer Sezzle. This can be done easily on the Sezzle website, which only takes a few minutes.

We verify your business: After applying, our team will need to verify your business before you can use Sezzle. This process usually only takes a few days.

Start offering Sezzle: Once you’ve been verified, you can start offering Sezzle to your customers at checkout! It’s that easy.

We pay you upfront: When a customer chooses to use Sezzle, we will pay the merchant the full purchase amount up front. This means you don’t have to wait for the customer to make their payments before receiving your money.

Collect your payments: Over the next six weeks, the customer will make three interest-free payments to Sezzle. We will then collect these payments and pass them on to you minus our fee.

That’s it!: Once the customer has made their final payment, you’ll receive the purchase amount minus our fee. We’ll close the account, and you won’t need to worry about it anymore.

You can use the Sezzle app as often as you like. There is no limit to the number of times you can use Sezzle. However, remember that each time you use Sezzle, you will be charged merchant fees.

For further learning on how to lower your expenses, check out How To Lower Your Cost Of Living, Despite High Inflation.

Fees and Charges

The customers using Sezzle don’t have to pay any interest on their purchase, and there are no hidden fees. The only fee customers need to be aware of is the late payment fee, typically around $10 per week.

Features for Buyers

As for buyers, Sezzle offers a few different features that can be beneficial:

Installments: Sezzle offers the ability to pay for purchases in four installments over six weeks. No interest is charged on these installments, so buyers only need to pay the purchase price plus any applicable fees.

No hidden fees: There are no hidden fees for using Sezzle, so buyers know exactly what they’re paying for.

No interest: Unlike other payment methods, Sezzle does not charge any interest on the payments. This means that buyers can take their time to pay for their purchases without worrying about any extra fees.

Automatic payments: Sezzle will automatically make the payments on behalf of the buyer, so they don’t have to worry about remembering to make their payments.

Early payment: Sezzle offers the ability for buyers to make early payments on their purchases. This can benefit buyers who want to pay off their purchase sooner or avoid late fees.

Late Payment Fees

Sezzle charges a late payment fee for any payments made after the due date. This fee is typically around $10 per week and will be added to the buyer’s account balance.

If buyers cannot pay, they can contact Sezzle to arrange a payment plan. This payment plan will allow the buyer to make smaller payments over a longer period.

There is also the option for buyers to use Sezzle’s autopay feature. This feature automatically withdraws the payment from the buyer’s account on the due date.

Merchant Fees

As for merchant fees, Sezzle charges a flat-rate fee of 6% and $0.30 per transaction. This fee is to cover the costs of using Sezzle, which will be deducted from the purchase amount.

Sezzle also offers the ability for merchants to provide discounts to their customers. This can benefit merchants who want to incentivize their customers to use Sezzle.

Reactivation Fees

If buyers do not make their payments on time, their accounts will be deactivated. This means the buyer will not be able to use Sezzle for future purchases.

To reactivate an account, Sezzle charges a $10 fee. This fee covers the costs of reactivating the account and ensuring that the buyer can still use Sezzle.


How do Sezzle payments work?

Sezzle payments work by allowing buyers to pay for their purchases in four installments over six weeks. No interest is charged on these installments, so buyers only need to pay the purchase price plus any applicable fees.

Can you use Sezzle anywhere?

Yes, Sezzle can be used at any merchant that accepts Sezzle as a payment method. As for online purchases, Sezzle can be used with any merchant with a Sezzle checkout button.

Should you use Sezzle as a merchant?

The answer to this question depends on the merchant. For merchants looking for an alternative to traditional credit cards, Sezzle can be a good option. However, it’s important to note that Sezzle does charge merchant fees.

However, Sezzle offers the ability to provide discounts to customers, and there are no hidden fees for using Sezzle.

Are credit checks done by Sezzle?

No, Sezzle does not do a credit check. Sezzle uses a “soft pull” to verify your identity and account information. This type of verification does not impact your credit score.

Does Sezzle report to the credit bureaus?

No, Sezzle does not report to the credit bureaus.

Final Thoughts

As you can see, Sezzle is a great option for buyers who are looking for an alternative to traditional credit cards. Sezzle charges no interest, and there are no hidden fees. Additionally, Sezzle allows merchants to offer discounts to their customers.

If you’re considering using Sezzle, check out the FAQs section. This will help you learn more about how Sezzle works and whether or not it’s the right choice for you.

Subscribe Now And Get Smart With Your Money!

We don’t spam! Read more in our privacy policy

Related articles