According to the federal lawsuit, which was filed on 16 June 2025 in the US District Court for the District of Minnesota, Sezzle alleges that Shopify leveraged its market power to make its instalment payment solutions the default BNPL provider on merchant websites, as well as that it manipulated the checkout process to make it difficult to select another BNPL option. Additionally, it is mentioned that Shopify imposed fees on merchants through contracts that penalise them for leveraging Sezzle or another BNPL provider.
Sezzle emphasised that Shopify’s misconduct systematically harmed its business with Shopify merchants, allowed Shopify to control the market, and reduced the BNPL options available to merchants and consumers. In its lawsuit, Sezzle seeks an injunction and financial damages.
The lawsuit also includes allegations that Shopify terminated merchants’ use of an inventory-locking tool designed to help retailers prevent oversales of their available inventory, enabling Shopify to provide that capability in return. Before Shopify rolled out its BNPL product in 2021, Sezzle stated that the total value of its transactions on Shopify stores surged by 1,200% from January 2019 to June 2021, with the number of Shopify merchants using Sezzle tripling.
Fast forward to 2022, Shopify started imposing a 1% to 2% penalty for every transaction processed through Sezzle or other third-party payment platforms, as detailed in the lawsuit. By 2023, Shopify’s BNPL product increased substantially on the Shopify platform, in turn reducing Sezzle’s business with merchants on the Shopify platform by half.
In addition to the lawsuit, Sezzle issued a press release in which the company underlined that the action taken against Shopify aims to ensure that merchants and consumers benefit from access to a variety of payment solutions of their choice. Also, the company mentioned its commitment to fostering a competitive, transparent, and consumer-friendly payment ecosystem.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now