From how next-gen consumers spend to who they spend with, Sezzle, the buy now, pay later (BNPL) solution with a commitment to financial empowerment and social good, knows that today’s consumers are shopping with a purpose – and that success in the future means offering a responsible way to spend.
As the first BNPL solution to become a Public Benefits Corporation, and certified B Corp, Sezzle is a customer-focused organization that helps users navigate financial responsibility; while also driving consumers to make smart decisions for the world around them. Beyond offering installment payment plans, the company’s Sezzle U initiative provides continuous education and answers to questions consumers have about building good credit, budgeting and the best ways to manage money while building their credit scores.
Sezzle’s “partners with purpose” initiatives engage consumers in making mindful purchase decisions and begin every new consumer relationship by planting a tree. Among other commitments, the company has also promised to become carbon neutral.
Here, Veronica Katz, Chief Revenue Officer at Sezzle, talks to Fairchild Media Group about understanding next-gen consumers, becoming a B Corp and empowering responsible consumerism.
Fairchild Media Group: In your own words, how is Sezzle different from other BNPL services?
Veronica Katz: In entering this industry, our founders sought to be more than just a “payments” company, but also a highly effective marketing organization that speaks a contemporary digital marketing language. One that is able to help merchants build a bridge to new generations of shoppers, who consume social media and influencer content more than they respond to traditional advertising. We are a payment option that also operates as a dedicated marketing agency for our merchant partners; one that collaborates with them on social-good and cause-marketing that is relevant and important to Sezzle users, and a key reason why Sezzle is the top-rated BNPL option. We put community, worldwide sustainability and DEI efforts right alongside retailing success. We have a diverse base of over 30,000 merchants, of all sizes and types – the largest of any BNPL-only brand.
From the consumer’s perspective, our own research shows that 81 percent of customers say it’s important, or very important, for them to shop and pay with brands that are aligned with their social values while 80 percent claim they will go out of their way to shop and pay with these aligned brands. Further, 89 percent of consumers claim they would shop with a merchant more often if it allowed them to pay with a socially responsible, value based company. And more than half of Sezzle users said they are aware we are a mission-driven organization focused on driving social good.
Sezzle differentiates itself from others in the space by actively pursuing our mission of financial empowerment for users. Sezzle comes with no predatory fees or interest charges, and we offer users flexible payment rescheduling. With every purchase, users are allowed to reschedule one payment free of charge, and Sezzle then charges only a nominal rescheduling fee. These considerate rescheduling options help Sezzle garner the highest-rated reviews.
FMG: What does it mean for Sezzle to be a B Corp?
V.K.: We’re the only payments company to become a B-Corp, which cements our dedication to provide resources that benefit all stakeholders (employees, customers, community, the environment, etc.), and not just shareholders. The B-Corp designation strengthens our positioning as the leading mission-driven payments platform in North America with a growing presence in Europe and Asia.
Worldwide, shoppers are seeking long-term, trusted partners to support them on their financial journeys. As a Public Benefit Corp and B-Corp, we have formally cemented our company’s ethos – ‘to financially empower the next generation’ – into our governance structure, marking our organization as more than just a “payments” company. In our research, we have found that 89 percent of Sezzle users said they would shop more at a retailer that allows them to pay with a socially responsible, value-based company. They extend trust towards purpose-driven brands. We believe that our efforts in sustainability, DEI, and values-based marketing are what gives customers more trust in Sezzle.
As a B-Corp, we are proud of our many ethical and sustainable brand partnerships with like-minded retailers, as we engage in social and environmental initiatives, from tree planting to COVID relief to carbon offsetting and educational scholarships. We collaborate with partners to build programs that benefit our mutual customers. As an example, Sezzle and Ministry of Supply launched a “starter kit” campaign with a commitment to donate $250,000 in clothing and masks to help Americans during the pandemic. More than 2,400 kits were distributed to those in need.
FMG: Can you elaborate on how Sezzle weaves responsible consumerism throughout its messaging?
V.K.: We promote responsible budgeting and spending and discourage Sezzle users from using Sezzle’s interest-free option to spend beyond their means. For this reason, users are not permitted to purchase with Sezzle if they are behind on payments related to any previous purchases.
While it is possible to place a new order with Sezzle while previous orders are not yet paid in full, users are unable to use Sezzle the minute a scheduled payment fails, until such time as the account is once again in good standing. This ensures our users acknowledge that they may be overextended and should press pause on further purchases until their account is once again current. This, along with the choice to opt-in to credit reporting with Sezzle Up, allows users to proactively take steps on their path to responsible spending, credit building, and financial freedom.
FMG: How does Sezzle put its mission of enabling financial empowerment into practice?
V.K.: Sezzle U, our financial literacy program, gives users the chance to learn about credit and broader financial knowledge from influencers and Sezzle partners. We also became the first BNPL to offer credit-building. Sezzle Up is an opt-in feature that works with users to help build their credit and boost their buying power. When a user upgrades to Sezzle Up, they enable us to report their payment history to the credit bureaus. By making their payments on time, they can increase their credit score.
Many young consumers are skeptical about traditional credit. Over 60 percent do not own a credit card and consequently are “thin file” — having no or very little credit history. And yet, they realize the importance of building a strong credit rating to achieve their lifestyle goals. Sezzle and Sezzle Up put them onto a graduated path to good credit, so that they can access and manage credit responsibly to fulfil their buying and financial goals. Eventually Sezzle users find that they may qualify for a store card at a favorite brand, where they would like to enjoy more purchasing power to meet their needs.
In addition to helping strengthen credit rating, Sezzle carefully increases users’ spending limit over time. This teaches users how to build credit responsibly without falling back on interest-bearing credit, fees, and growing debt.
FMG: From your perspective, what are the biggest changes in consumer behavior in the last year, and how has Sezzle adapted to the new needs of the consumer?
V.K.: In the past year, we have seen a dramatic shift in retail. This shift has led to an accelerated evolution of payments, technology, and their interwoven relationship. And as this pandemic continues to affect the structure of retail, we have still seen positive outcomes – necessary outcomes in consumerism.
In order to keep pace with rapid shopper adoption, retailers will be put under strain to match the acceleration of technological advancements in the retail experience. BNPL use has dramatically increased during COVID. It is seemingly the ideal solution for safe spending during a crisis period. Nearly half of consumers report that using a buy now, pay later option is somewhat or very important in determining how much they spend during the holidays.