Buy-now, pay-later (BNPL) provider Sezzle has filed an antitrust lawsuit against eCommerce giant Shopify, accusing the Canadian firm of using monopolistic and anti-competitive tactics to suppress payment competition on its platform.
The lawsuit, lodged on Monday, June 9, in the U.S. District Court for the District of Minnesota, claims Shopify has unfairly restricted merchant access to alternative BNPL providers. Sezzle is seeking an injunction to stop what it calls “unlawful practices” and is demanding treble damages — triple the amount that may be awarded by a jury.
“Sezzle remains committed to fostering a competitive, transparent, and consumer-friendly payments ecosystem,” said Charlie Youakim, Sezzle’s Chairman and CEO. “This action is an important step in ensuring that merchants and consumers have access to diverse and innovative payment solutions of their choice.”
According to Sezzle’s statement, less than 5% of its revenue in the first quarter of the year was tied to transactions originating from Shopify’s platform. The lawsuit appears aimed more at establishing legal precedent than recovering lost income.
Shopify has yet to respond to requests for comment.
In a separate legal challenge, Shopify is also the subject of a data privacy class action in the U.S., brought by a California consumer who alleges that the company installed tracking software on his iPhone during a retail transaction without consent. The lawsuit claims Shopify then used this data to create a consumer profile and shared it with other retailers.
These developments come at a time of rapid evolution in the BNPL sector. Research by PYMNTS Intelligence, published in the report “Pay Later Revolution: Redefining the Credit Economy,” estimates that 128 million Americans used a BNPL product in the past 12 months, accounting for a total of $175 billion in transactions.
The sector is shifting beyond its original “pay-in-four” model. Providers like Klarna, Affirm, and Sezzle are introducing new features, including flexible credit options and BNPL-linked cards, to broaden their consumer appeal.
The report also highlights that 46% of Gen Z and 47% of millennials used BNPL in the past year. Notably, over 40% of surveyed consumers stated they would abandon a purchase altogether if BNPL options were unavailable. What began as a tool for smaller purchases is now mainstream: nearly 60% of U.S. consumers using BNPL for convenience have household incomes exceeding $100,000.
As Sezzle pushes back against what it claims are anti-competitive barriers, the case could have broader implications for how eCommerce platforms manage access to financial technology on their sites.