Making the choice between Sezzle vs Afterpay can be difficult. Both of these tools offer buy now pay later solutions, to ensure you can access the products and services you need quickly, even when you don’t have all the cash required straight away.
Buy Now Pay Later, or “BNPL” services are growing increasingly popular, with a market value prediction of $20.40 billion by 2028. These solutions have exploded into the market since the pandemic, as people search for a more affordable way to access the products they need without spending a fortune in an initial purchase.
Sezzle and Afterpay both have a lot of similarities, like allowing you to minimize the cost of a big purchase by spreading it out over a certain period. However, there are some major differences between the two offerings. Here’s what you need to know about Sezzle and Afterpay.
Sezzle vs Afterpay: An Introduction
Both Sezzle and Afterpay are Buy Now Pay Later service providers. This simply means they allow you to purchase products immediately but pay only a small portion of the total price at first. After paying a fraction of the cost for the item initially, you agree to a term where you pay back the rest on a weekly, bi-weekly, or monthly basis.
Both Sezzle and Afterpay (now Clearpay) provide users with a range of options when it comes to paying back what they owe, so you can ensure your schedule suits you. Both solutions also make it relatively easy to apply for your service.
What is Afterpay?
Afterpay (now Clearpay) is an easy-to-access money borrowing solution which requires no initial credit check, so you don’t have to worry about your credit report. Afterpay was first launched in Sydney, Australia, in 2015, and has grown over the years to attract millions of customers worldwide. The company also has thousands of merchant partners. You don’t pay any fees with Afterpay provided you pay what you owe on-time.
What is Sezzle?
Sezzle is a popular BNPL solution similar to Afterpay, which provides people with a quick and easy way to shop for products using an online app. You don’t have to pay any interest if you pay back your order within four sections. Alternatively, you can give yourself some extra time to pay things back if you’re willing to potentially pay interest. There’s also no impact on your credit score.
Sezzle vs Afterpay: How They Work
Sezzle and Afterpay are both relatively similar tools. Each solution will allow you to purchase products from merchant partners with an initially small fee, and a scheduled series of payments to follow. With Afterpay, you’ll need to download an app on your smartphone, where you can search through all the merchant partners available.
Tap on the websites of the companies you want to shop with, and simply add items to your cart as normal. When the time comes to checkout, you’ll have the option to apply “Clearpay” as your payment solution. Clearpay will split your payment into a series of ten transactions. You pay the first four payments initially, then the other 6 once a week, for a period of 6 weeks.
Afterpay makes it quick and easy to sign up with no credit check, although there is a relatively small limit to what you can spend initially. Usually, spending limits start at around $150 and increase over time when you prove your credit worthiness. You can also see your limit go down if you don’t pay back what you owe on-time.
Sezzle, like Clearpay, has its own app you can use to search for products from your favorite merchants. There are more than 44,000 brands to shop at and signing up is extremely straightforward too. You should get approval for your account instantly.
Once you have your account and you choose the company you want to shop with, simply add your products to cart as normal, and choose the “Sezzle” option for your payment process. You’ll then have the option to split your payments into four or 6 payments, one week at a time. There aren’t any interest fees if you pay everything you owe on-time.
Both Afterpay and Sezzle also allow you to shop with them in-person. The Afterpay (ClearPay) company allows you to generate an Afterpay card and save it to your Google Pay or Apple Pay account when you’re checking out. Sezzle offers a virtual card you can add to your Google or Apple Pay too, but you may need to use the service a few times before your eligible.
Sezzle vs Afterpay: Credit Requirements
It’s important to remember that with buy now pay later services, you are borrowing money, which means you may be subject to a credit check. With this in mind, it’s worth looking into which of your credit providers need a check before you sign up.
Clearpay (Afterpay) does not request a credit check for you to get started. Instead, you only need to enter a few details, like your phone number, date of birth, email address, and a credit/debit or bank account. You will also need a valid ID in some cases. Afterpay does not send any reports to the credit agencies about late payments, but you will have fees to pay if you’re late.
Afterpay’s decision not to conduct a credit check means you will only have a limited amount of access to credit initially, until you can prove your credit worthiness. You’ll gradually be able to increase your limit over time, but you can also decrease that limit if you’re not paying according to your agreed schedule.
Sezzle runs a soft credit check, which means it shouldn’t impact your score to make an inquiry. However, the Sezzle team may report any late payments from your loans to your credit bureau, which means you may have a negative impact on your score if you don’t pay back what you owe as you should. Similarly to Afterpay, Sezzle also gives you an initial limit on your payment options, usually starting at around $200.
Sezzle vs Afterpay: Fees and Interest Rates
Though there are some differences between paying for items in installments with tools like Klarna, Affirm, Sezzle, and Afterpay, and using a credit card, there are similarities too. You’re still borrowing money to shop with your favorite retailers which means both fees and interest need to be considered.
With Sezzle and Afterpay, you’ll be able to borrow your money interest-free, for as long as you continue to pay back what you owe on time. The technology will attempt to withdraw the money you owe from your bank or debit card according to the term you agreed upfront.
Late fees, on the other hand, are a different story. With buy-now-pay-later services, the most common way for the company to make money is through late fees. Afterpay will charge around $10 if the order value is less than $40. This cost is switched to 25% of the instalment if the order price is over $40. The late fee will give you an additional seven days to pay what you owe.
If you don’t pay for the owed instalment within the seven days, another $7 in late fees will be charged to your chosen payment methods.
Sezzle gives you an additional two days to repay what you owe without any expenses. However, if you don’t make your payment, you’ll be charged $10. You also have your account deactivated, which means you can’t shop with your preferred e-commerce and in-person stores until you’ve regained good standing with the lender.
Sezzle vs Afterpay: For Businesses
Both Sezzle and Afterpay are similar BNPL providers, offering solutions to both consumers and businesses alike. For instance, Sezzle offers a range of features to business owners who want to access the functionality for their customers. You can offer Sezzle as a payment solution alongside other options like PayPal or Amazon Pay. It’s a great way to increase cash flow with your customers.
When you add Sezzle to your business, you’ll be able to offer your users installment payments to help increase your conversions. This means your customers only need to pay an initial down payment the first time they buy something, then they can pay the rest of what they owe in interest-free installments. Sezzle sends the money directly to you, but you will have to pay a percentage of each transaction and a processing fee for each transaction.
The cost for allowing customers to shop with Sezzle on your website is 6% of each transaction, plus 30 cents for processing. Like Sezzle, Afterpay also supports companies looking to provide their customers with a new method of shopping. You simply set up your partnership with Afterpay, and you can join the list of companies on the brand’s app.
You’ll receive the money for any transactions from Afterpay immediately, so you don’t have to worry about making ends meet while your customers pay in installment. Each online shop is charged a flat rate of 30 cents for every transaction, and a commission cost. The commission price will depend on how much you sell. The more transactions you process, the lower the cost will be.
Sezzle vs Afterpay: Customer Service
Sezzle operates in Canada, the Bahamas, Moldova, and various other locations, Afterpay is available in more than 131 countries, worldwide. Though Afterpay offers a wider service reach to users all over the globe, Sezzle is better-known for its excellent approach to customer service.
If you’re having issues with a payment, or you’re struggling to pay back what you owe according to the installment agreement, you may have a harder time reaching out to Afterpay. Sezzle has a phone number you can call from 8 to 5pm or you can contact the company at an email address.
Afterpay also has a phone number or email address, but it can be much harder to get an answer from the staff you need to talk to.
Sezzle vs Afterpay: Risks
Sezzle and Afterpay are two effective ways to attract the attention of Millennials and other younger shoppers who don’t want to rely on putting the items they want on layaway. With access to interest-free payments, customers can purchase the items they want with minimal risk, provided they’re willing to pay the remaining order value of their purchase on time.
For an online store, BNPL solutions offer an additional payment plan solution to help you attract potential shoppers and increase conversions. The option to spready out a repayment is often particularly attractive to younger customers, particularly after the pandemic.
Both Afterpay and Sezzle are spreading across multiple ZIP codes, and they integrate with a host of leading online store builders, from Shopify to WooCommerce. If you want to give your customers more options at the time of purchase, both tools will allow you to do so, just keep an eye on the fees involved with processing transactions through these companies.
For consumers, Sezzle and Afterpay are convenient shopping tools, but they can also be risky. Compared to credit cards and other lending options, both of these tools are generally less expensive, with no interest to worry about if you’re paying what you owe on time. However, there is a risk you may overspend if you’re not careful.
Sezzle vs Afterpay: Which is Best?
Both Sezzle and Afterpay are convenient tools for people in search of buy-now-pay-later solutions. However, it’s important to make sure you know exactly what you’re getting into before you sign up with either solution as either a shopper or a business, Afterpay and Sezzle both have their pros and cons to consider. Do your research before you dive in, and remember that each of these tools will also have their own risks.
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