Will Sezzle (ASX:SZL) shares rise on partnership with Ally?

Sezzle Inc (ASX: SZL) has announced that it’s going to partner with Ally Lending. The Sezzle share price will be on watch this morning.

Sezzle is a US based, buy now pay later operator. At the latest count it had more than 1.6 million active consumers across the US and Canada. It also has 17,600 active merchants.

Sezzle’s new partnership

Sezzle is going to partner with Ally lending, which is part of Ally Bank, which is the banking subsidiary of Ally Financial (NYSE: ALLY).

Ally Financial is a digital financial services company with US$184.1 billion in assets at 30 June 2020.

Ally Lending enables monthly fixed-rate installment-loan products that extend up to 60 months in length and US$40,000 per installment plan.

Apparently Ally has a NPS score of 68 which shows how much it is committed to the customer with aims like “Do Right” and “Obsess over the customer”. Sezzle seems happy to partner with this type of business.

The partnership between Ally Lending and Sezzle will give Sezzle merchants and shoppers access to long term financing options, adding to Sezzle’s existing short term, interest free offering, without adding any balance sheet impact to Sezzle.

Sezzle CEO and Executive Chairman Charlie Youakim said: “Our collaboration with Ally Lending enhances our customer financing offerings, making it possible for consumers to better manage their finances. Ally’s dedication to its customers and commitment to innovation aligns with our own vision and culture – making this partnership a good fit for us.”

Ally Lending President Hans Zandhuis said: “We empathize with the economic situation millions of Americans now face. We’re proud to partner with Sezzle to offer budget-friendly, responsible financing options, so consumers can feel more secure when making the purchases they need.”

Summary

This seems like a good move by Sezzle. Increasing the size of the potential transactions that can occur on its platform increases the total addressable market. The business reported good growth in its recent result.

Sezzle is making the right moves to increase its market share and combat others like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). Being able to help customers with any purchase could make it more likely that they stay on the Sezzle platform for all purchases.

However, there are plenty of other ASX growth shares I’d rather buy first. In the payments space I’d rather invest in Pushpay Holdings Ltd (ASX: PPH). The BNPL space seems too hot and there’s too much competition for me.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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