Shopify Faces Sezzle’s Antitrust Lawsuit Over BNPL

In simple terms, this is a legal fight between two companies: Sezzle (a small U.S.-based company that helps people buy stuff online and pay in installments over time, called “buy now, pay later” or BNPL) and Shopify (a big Canadian company that provides tools for businesses to build and run online stores). Sezzle says Shopify is bullying them out of the market by unfairly favoring its own BNPL service, which hurts competition. Shopify denies this and wants the whole case thrown out of court. The lawsuit is about “antitrust” laws, which are rules to stop big companies from acting like bullies and squashing smaller ones.

Quick Background on the Companies

• Sezzle: Started in 2017 in Minneapolis, Minnesota. It partners with online stores to let customers split payments into small chunks (like 4 interest-free payments). It’s focused on making shopping easier for everyday people without high fees or credit checks.
• Shopify: A giant in e-commerce (powers about 10% of U.S. online stores). It launched its own BNPL option in 2021 called Shop Pay Installments (powered by another company, Affirm), which lets shoppers pay over time right at checkout.

Sezzle and Shopify used to get along—Sezzle’s service worked well on Shopify stores, and both made money. But things soured when Shopify started its own BNPL product.

What Sezzle Claims Shopify Did Wrong

Sezzle filed the lawsuit on June 9, 2025, in a federal court in Minnesota. They accuse Shopify of breaking U.S. antitrust laws (like the Sherman Act) and Minnesota state laws by:

• Making its own BNPL the “default” option: On Shopify stores, Shop Pay Installments pops up first at checkout, so customers see it more easily. Sezzle says this uses Shopify’s huge market power (it’s the biggest e-commerce platform) to steer people away from competitors.
• “Rigging” the checkout process: It’s supposedly “extraordinarily difficult” for shoppers to pick Sezzle or other BNPL options—maybe hidden buttons or extra steps. This makes it feel like Shopify is forcing its service on everyone.
• Charging penalty fees to merchants: Starting in 2022, Shopify allegedly adds 1-2% extra fees to stores that use non-Shopify BNPL services like Sezzle. Sezzle calls this a “penalty” that punishes millions of small businesses for choosing options.
• Copying Sezzle’s idea: Sezzle claims Shopify “watched their instant success” and copied the BNPL model, then used dirty tricks to crush the original.

As a result, Sezzle says its business on Shopify dropped a lot. By 2024, Shopify’s BNPL handled over 75% of BNPL transactions on its platform (up from nothing in 2021). For context, in early 2025, Shopify-related sales made up less than 5% of Sezzle’s total money, but Sezzle still sees it as a big fairness issue.

Sezzle wants:

• A court order (injunction) to stop Shopify from doing these things.
• Treble damages (three times whatever losses a jury awards, which could be millions).
• The goal? More choices for shoppers and store owners, and fair play in the BNPL world.

Sezzle’s CEO, Charlie Youakim, said: “We want a competitive, transparent payments system where merchants and customers pick what they like best.”

Shopify’s Side: Why They Want It Tossed

Shopify isn’t sitting quiet. They say Sezzle’s claims are “implausible” and just sour grapes over losing customers. Key points from Shopify’s defense:

• Lots of choices already: Checkout pages show “no fewer than 16 payment options,” so it’s not hard to pick Sezzle. No monopoly here.
• No real harm: Sezzle hasn’t proven Shopify hurt competition overall—the BNPL market is growing, and other providers (like Affirm) are doing fine.
• Business is business: Launching their own product and charging fees is normal competition, not illegal bullying.

Shopify’s lawyers filed to dismiss the case “with prejudice” (meaning it can’t be refiled) on September 19, 2025. They argue the whole thing is built on “nothing but Sezzle’s dissatisfaction with its own lost business.”

Suggested Read: Marketplace Burnout? Why Your Own Online Store is Better in 2025

Timeline of Events

Here’s a simple breakdown of how this unfolded:

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