Podcast Summary: Motley Fool Money — Interview with Sezzle CEO Charlie Youakim

Date: November 16, 2025
Host: Tom Gardner, with producer Matt Grier
Guest: Charlie Youakim, Co-founder and CEO of Sezzle

Episode Overview

In this episode, Tom Gardner interviews Charlie Youakim, CEO and co-founder of Sezzle, during a Motley Fool member event. Their deep-dive discussion covers Charlie's entrepreneurial journey, the evolution and perception of the Buy Now, Pay Later (BNPL) industry, Sezzle's unique approach and competitive positioning, responses to economic downturns, and Youakim’s long-term vision. The episode aims to educate both investors and the general public about how BNPL works, address common criticisms, and illustrate Sezzle's differentiated value in the market.

Key Discussion Points and Insights

Charlie’s Entrepreneurial Beginnings

• No Lemonade Stand Start:
  • Charlie did not come from an entrepreneurial background or have early business ventures, instead he enjoyed gaming and technology.
  • "I wasn't the lemonade stand kid, that's for sure. I was a video gamer... but no entrepreneurs in my like family or friend group." (00:52)
• First Company: Passport
  • Started in mobile payment apps for parking, after an initial misstep into hardware.
  • Despite naysayers, they introduced wallet functionality and white labeling—innovations that led Passport to become a market leader in its space.
  • "We just kept on innovating and adapting... that company is currently a market leader." (01:52)

The Pivot to Sezzle and BNPL

• Charlie transitioned focus from parking and local payments to broader retail payments, attracted by the emerging BNPL model in Australia.
• The company pivoted from a "Venmo for checkout" approach to BNPL, which led to rapid growth.
• "We noticed Buy now, pay later...taking off in Australia. We pivoted to it and it was just a rocket ship from that point forward." (02:28)

Understanding Buy Now, Pay Later (BNPL) vs. Credit Cards

• Customer Psychological Safety:
  • BNPL provides a structured, budget-friendly payment experience tailored to younger, often mid-to-low income users with bi-weekly pay schedules.
  • "With BNPL, the customer actually feels safer...the payments are planned." (03:18)
• Product Differences and Incentives:
  • BNPL swiftly cuts off users who miss payments, discouraging overspending.
  • Traditional credit card companies have incentives for customers to overextend, making profit from ongoing revolving debt.
  • "Credit cards are inclined to get people over their skis, which is... why these young customers are afraid." (04:17)
• Risk and Holidays:
  • Sezzle proactively lowers limits and restricts risk during high-spending periods, a contrast to credit cards’ profit model during the holidays.
  • "We really play defense in the holidays to make sure people don't overextend themselves." (05:12)

Default Risks and Economic Downturns

• Customer Base:
  • Sezzle primarily serves "more paycheck to paycheck" users, who are "already in a bit of a recession." (07:54)
• Real-time Credit Control:
  • Sezzle can instantly restrict credit and react to financial difficulties or market abnormalities, which credit cards cannot do as quickly due to regulation.
  • "We can lower limits next hour...if we're seeing things we don't like." (08:44)
• Business Resilience:
  • High gross margins and loss buffers allow Sezzle to be profitable even if defaults increase threefold.
  • "We can basically triple our loss rates and still come out with a profit." (09:52)

What Are Customers Using Sezzle For?

• Initially dominant in beauty, cosmetics, fashion, and supplements in e-commerce.
• Now, with "open loop" offerings (virtual cards), customers also use Sezzle broadly at mass retailers (e.g., Target, Walmart, Home Depot), especially for general $100-$120 purchases.
• "We're seeing more and more purchase behavior is toward just general purpose purchase between 401ks." (11:35)

Why Choose Sezzle Over Klarna or Others?

• Credit Building:
  • Sezzle uniquely reports credit, helping young/new-to-credit users build a credit history—the only BNPL provider to do so early on.
  • "If I couldn't recommend the very product I'm helping build to my son, what the hell am I building?" (14:21)
• Open Loop Products:
  • Sezzle offers virtual cards for general usage, akin to a general-purpose credit card, so customers aren't tied to specific merchant partnerships.
  • "Would you rather have 15 private label credit cards or... your general purpose credit card?" (14:54)

Competition and Market Growth

• Market remains nascent with a projected 7–10 years of continued strong growth—a "rising tide for all players."
• Positive view on competition, likening business to sport; healthy rivalry accelerates innovation.
• "Tennis would really suck if you're sitting up against the board all day...it's way more fun...what can we do to out compete them?" (15:53)

Charlie’s Vision for Sezzle

• Thinks in five-year increments.
• Aspires for Sezzle to become the "must have" financial and shopping app for mid- to low-income, younger consumers—"the heart of America."
• "If...they found out their friend doesn't have the app on their phone. Why don't you have Sezzle? You got to download it." (18:01)

Notable Quotes and Memorable Moments

• "We just didn't. We just kept on innovating and adapting." — Charlie Youakim on persistence with his first startup (01:52)
• "With BNPL...the moment there's a missed payment...you can't use this anymore...flip that to the credit card companies, I think they're inclined to get people over their skis." — Charlie Youakim (04:17)
• "Our customer is more paycheck to paycheck than the average customer anyway...this customer's already in a bit of a recession." — Charlie Youakim (07:54)
• "If I couldn't recommend the very product I'm helping build to my son, what the hell am I building?" — Charlie Youakim on credit building (14:21)
• "I really do believe, Tom, that we have good competition...I really view business as like a sport." — Charlie Youakim (15:53)
• "Five years from now...I want that group of consumers to see us as a must have application on their phone." — Charlie Youakim (17:37)

Timestamps for Important Segments

• Entrepreneurial Roots and First Startup: 00:40 – 02:27
• Sezzle’s BNPL Pivot and Early Growth: 02:27 – 02:54
• How BNPL Differs from Credit Cards: 02:54 – 05:12
• Default Risks & Recession Response: 07:20 – 10:22
• What Customers Buy with Sezzle: 10:22 – 11:58
• Why Pick Sezzle Over Competitors: 13:07 – 15:13
• The Competitive Landscape: 15:13 – 17:20
• Five-Year Vision for Sezzle: 17:20 – 18:13

Summary: Key Takeaways

• Sezzle stands out by helping customers build credit and offering widely usable virtual cards.
• BNPL can be safer for budget-conscious and younger consumers than traditional credit cards when designed with prudent controls.
• Real-time risk management provides Sezzle with agility, especially valuable in an economic downturn.
• The BNPL industry is early-stage with room for multiple winners; healthy competition is seen as an accelerant, not a threat.
• Sezzle’s vision is to become essential—the must-have app for America’s younger, mid- and lower-income population.

This episode offers a robust introduction to the BNPL space, Sezzle’s innovative approach, and a grounded assessment of risks, rewards, and future market dynamics, directly from the founder’s perspective.