Sezzle’s BigCommerce Agreement Signals BNPL Now a Tabletop Stake for Ecommerce Platforms – Digital Transactions
In the wake of the acquisition of Afterpay Ltd. by Square Inc., other Buy-It-Now and Pay-On-Pay providers are trying to strengthen their position in BNPL’s highly competitive market.
Sizzle Inc. on Tuesday reached an agreement with e-commerce platform BigCommerce Holdings Inc. to become its preferred partner of BNPL. BigCommerce will integrate Sezzle as a payment gateway into its control panel, allowing merchants running on its platform to offer BNPL at checkout. In the Sezzle model, consumers pay 25% of the balance at the time of purchase, then make three additional payments of 25% each over the next six weeks. Square on Sunday announced the acquisition of Afterpay for $ 29 billion.
This move is a signal that BNPL is becoming a necessary business component for e-commerce platforms. “BNPL is a valuable option that should be a part of every e-commerce platform because it was originally designed for e-commerce,” said Brian Riley, director of credit counseling at Mercator Advisory Group , Marlborough, Mass.
The deal is also expected to extend Sezzle’s reach to younger consumers, who have shown a tendency to turn to BNPL. More than 45 million people aged 14 and over in the United States will use BNPL’s services this year, giving merchants the chance to appeal to a new generation of shoppers looking for alternative payment methods that help them to overcome cash flow or credit quality problems, says Wholesale trade. Overall, 60% of shoppers in the United States used BNPL financing for an online purchase.
“Merchants are increasingly adopting these solutions for their e-commerce stores in response to customer demand, especially younger consumers who find the installments-based model attractive,” said Mark Rosales, vice president of payments at BigCommerce, in a prepared statement.
BigCommerce, based in Austin, Texas, said it has partnerships with several other buy-now, pay-on-the-money providers and will continue to assess BNPL’s opportunities to meet merchant needs.
As the number of consumers using BNPL increases, one of the risks that providers face is their ability to manage risk, especially when extending credit to consumers with a risky credit rating. “This is a concern because many loans granted by BNPL suppliers are not of bank quality. BNPL providers typically require a light credit check, ”says Riley. “The game right now [for BNPL providers] is to book customers and help merchants close a sale, but that will change as more payment networks come into play. “
Minneapolis-based Sezzle has already taken steps to position itself in payment networks, announcing a partnership with To discover in February.
For his part, Sezzle says that while a good portion of consumers who use his service have no credit or low credit scores, he has built a strong model of risk management and fraud prevention. “Our goal is not for consumers to take their skis off when it comes to credit,” says Veronica Katz, Sezzle’s chief revenue officer, who adds that Sezzle also offers a product that helps consumers build their credit rating.