WebBank to Serve as Sezzle’s Exclusive Bank

Buy now, pay later (BNPL) firm Sezzle plans to have WebBank serve as its exclusive bank to originate and finance products offered through the Sezzle platform, including its Pay-in-2 and Pay-in-4 products.

The two companies entered into a strategic partnership program by executing a loan and receivables sale agreement and marketing and servicing agreement on Monday (Aug. 26), Sezzle said in a Wednesday (Aug. 28) filing with the Securities and Exchange Commission.

Subject to completion of confirmatory testing and procedures, the program is expected to launch in September, according to the filing.

Under the agreement, WebBank will also serve as the exclusive issuer of all Sezzle subscription products and of Sezzle card products, per the filing.

“WebBank, through Sezzle’s marketing efforts, will offer loans to U.S. customers to finance purchases of merchant products through the Sezzle platform or within Sezzle’s direct merchant network,” the filing said. “Sezzle, subject to WebBank’s review and approval, will act as the administrator of the program and master servicer, with responsibility over the marketing, administration, legal and compliance, application of WebBank’s underwriting criteria, origination assistance, and ongoing servicing functions.”

Sezzle CEO Charlie Youakim said Aug. 7 during the company’s quarterly earnings call that Sezzle was nearing the completion of its implementation with a bank sponsor partner.

The benefits of the sponsorship are expected to include the launch of unified fees; a streamlined regulatory approach; and future potential consumer product launches, including checking accounts, cash advances and credit-building products, Youakim said.

Wednesday’s SEC filing comes on the same day Sezzle said it teamed up with embedded finance platform Liberis to launch Sezzle Capital, a program designed to help small and medium-sized businesses (SMBs) get financing without sacrificing equity.

The program is designed to offer “flexible funding” to SMBs in the U.S., and there are plans to eventually launch in Canada.

“At Sezzle, we’re committed to empowering the next generation of business owners through accessible funding opportunities for merchants of all sizes,” Youakim said in a Wednesday press release announcing the collaboration. “Through our partnership, we’re thrilled to offer our merchants funding via Liberis — without the need to give up equity in their businesses.”