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As part of its strategy to become a full-service payments provider and serve a wider consumer base, buy now, pay later provider Sezzle Inc. on Monday announced a partnership with Alliance Data Systems Corp. to offer Alliance Data’s Bread installment-loan service to Sezzle merchants.
The partnership builds on a deal Sezzle struck earlier this year with Ally Financial, the personal lending arm of Ally Bank, to enable Sezzle shoppers to use Ally to finance purchases up to $40,000, with monthly fixed-rate installment loans for up to 60 months.
The deal with Alliance Data will give Sezzle users a payment option they can use to finance the purchase of big-ticket items, such as jewelry, furniture, and electronics, over a three-to-48-month period at a low interest rate. Interest rates for Bread loans start as low as 0% for qualified customers on certain loans.
One advantage of installment loans is that they are better-suited to finance large purchases, as consumers pay a predetermined amount of several hundred dollars a month for the term of the loan, compared to $50 every two weeks over a period of up to three months, for example. Bread, which was acquired by Alliance Data in late 2020 , will originate the loans through its affiliate, Comenity Capital Bank.
“Large purchases of several thousand dollars are not well-suited to buy now, pay later loans,” says Rob Seidman, vice president of product and long-term solutions for Sezzle. “With Bread, consumers will have a longer period over which to repay the loan.”
The addition of Bread is also expected to broaden Sezzle’s appeal to merchants as Sezzle can now offer another payment option to consumers. “This partnership allows us to serve a wider range of merchants, especially big-ticket merchants, and gives consumers an option to pay over a longer period of time than a BNPL loan,” says Seidman. “The addition of Bread helps fill out our product suite and positions us to become a full-service payments company.”
Sezzle has more than 40,000 merchants in its portfolio.
“We approach our products and experiences with a consumer lens, and this alliance speaks not only to the strength of Bread’s installment product, but also to its modern technology and straightforward, user-friendly experiences,” said Val Greer, executive vice president and chief commercial officer for Alliance Data, in a prepared statement. “This agreement allows for Bread and Sezzle to expand their reach and unlock mutual growth, while also giving more merchants the tools for success by appealing to a variety of customers and basket sizes.”
