Sezzle Online Installment Plans Appeal To Millennials Without Credit Cards

By Lee Schafer
Star Tribune (Minneapolis)

WWR Article Summary (tl;dr) “Sezzle” offers an online form of an installment payment plan at no cost to consumers. The merchant is charged the fee.

Star Tribune (Minneapolis)

People younger than 35 are far less likely than older Americans to pay for something with a bank-issued credit card.

It could be that these young people, as a group often called the millennials, have figured out that credit cards can be hazardous to their financial health. If so that’s great, as millennials don’t usually get much credit from their parents’ generation for being savvy with their money.

The reality, though, turns out to be more complicated. Most people need to borrow money, at least occasionally, but many of these young adults can’t borrow money the way their parents do. That’s because they were turned down for a credit card.

This finding by a young Minneapolis financial services company called Sezzle helps explain what has long been puzzling — and helps explain how so many entrepreneurs can see a great opportunity when American Express Co., U.S. Bancorp, Fidelity Investments and Wells Fargo Home Mortgage are all still very much in business.

Sezzle is part of a boomlet of financial technology startups since the Great Recession, with nearly 650 of them just in the narrow market segment of alternative payments, according to a report last year from the global accounting and consulting firm Deloitte. There are more than a few “fintech” firms besides Sezzle in the Twin Cities.

The founders of Sezzle, Charlie Youakim, Killian Brackey and Paul Paradis, got going in early 2016. They had studied the credit habits of millennials, and at first even they didn’t quite get the problem. They thought young consumers were staying away from credit cards because they didn’t want them.

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