Pay-later platformSezzlehas filed an antitrust lawsuit against eCommerce platformShopify.
The lawsuit, filed Monday (June 9) in theU.S. District Court for the District of Minnesotaaccuses Shopify of engaging in monopolistic and anticompetitive practices to limit competition for buy now, pay later (BNPL) options on its platform.
Sezzle said in anews releasethat it is seeking an injunction to block Canada-based Shopify from continuing this alleged conduct, with the suit asking for treble damages, or damages three times the amount awarded by a jury.
“Sezzle remains committed to fostering a competitive, transparent, and consumer-friendly payments ecosystem,” Sezzle Chairman and CEOCharlie Youakim said in the release.
“This action is an important step in ensuring that merchants and consumers have access to diverse and innovative payment solutions of their choice.”
The release also said that, for the first quarter of the year, “revenue associated with gross merchandise volume” attributable to Shopify’s platform accounted for under than 5% of Sezzle’s total revenue.
PYMNTS has contacted Shopify for comment but has not yet gotten a reply.
Shopify is also facing adata privacyclass action lawsuit in the U.S. after a California man accused the company of placing tracking software on his iPhone without his permission when he made a purchase from a retailer, and then used his data to develop a profile and sell it to other retailers.
This more recent case comes as BNPL options continue to evolve as the payment method grows in popularity.
Research by PYMNTS Intelligence, as estimated in the report titled“Pay Later Revolution: Redefining the Credit Economy,”shows that 128 million Americans used a pay-later product from at least one alternative credit provider in the past 12 months, with American BNPL transactions now totaling $175 billion.
“The business models of the providers —ClearandAffirmand Sezzle among them — have moved beyond the ‘pay in 4’ construct. In recent months, new announcements surrounding flexible credentials and BNPL provider-issued cards have been instrumental in broadening short term credit’s reach,” PYMNTS wrote.
PYMNTS research found that 46% of Gen Z and 47% of millennials had used BNPL in the past year. More than 40% of consumers surveyed have said that if BNPL options were not available, they simply choose not to make a purchase.
“Theinitial appeal of BNPLa decade ago, may resided with small-dollar transactions and lower-income consumers; now 6 in 10 of all U.S. consumers who use the payment method for convenience make at least $100,000 a year,” the report added.
