The DBO’s approval means that Sezzle can now continue to operate seamlessly in the state and continue to act as the leading U.S.-based installment payment platform, according to a press release from the company.
Sezzle allows users to purchase a product and make payments over time. This is referred to as Buy Now, Pay Later (BNPL), a fast-emerging trend in sales.
With Sezzle, customers can opt to pay 25 percent of a product’s price up front, and pay the rest in increments over a series of weeks. The DBO said Sezzle gets a cut of each payment made through its service.
Earlier this month, the state of California denied Sezzle the license, stating that the company’s purchase of the contracts indicated that it had already been doing business without a license beforehand.
In response, Sezzle’s shares fell about 40 percent, to about $131.
An agreement was reached for Sezzle to pay back Californians $282,000 for fees it charged in the past. It will also pay a $28,200 penalty.
California allowed Sezzle to have its license after all once the company agreed to state regulatory oversight, audits and examinations.
Sezzle is one of many BNPL firms that have faced scrutiny, as regulators are concerned that the arrangement is nothing more than a traditional bank loan under a different name, like in Sezzle’s case when users were utilizing the service to make multiple card transactions over time.
But as he emerged victorious on Thursday, Sezzle CEO and Executive Chairman Charlie Youakim said that he was appreciative of the state’s professional and timely handling of their case.
Youakim said he was just glad Sezzle could now continue its planned expansions in the state of California.