Shopify has moved to dismiss the antitrust lawsuit brought against it by buy now, pay later (BNPL) provider Sezzle, escalating a dispute that has become a flashpoint in the sector’s battle for reputation and market share.
The Ottawa-based eCommerce platform reportedly filed a motion in the US District Court for Minnesota last week, arguing that Sezzle’s complaint is “nothing but dissatisfaction with its own lost business” rather than evidence of unlawful conduct.
Shopify said antitrust law is designed to protect competition as a whole, not the commercial interests of individual companies.
Sezzle launched its suit in June, accusing Shopify of using its market dominance to prioritise its in-house instalment service, Shop Pay Installments, and undermine rivals. The BNPL firm alleged that Shopify had “rigged” its checkout flow to make it “extraordinarily difficult” for merchants and consumers to select another provider.
The complaint also claimed that contractual penalties were imposed on merchants who attempted to integrate external instalment lenders.
The Minnesota-based lender framed these practices as violations of the Sherman Antitrust Act, the Clayton Act, and state-level deceptive trade law. Sezzle CEO Charlie Youakim said at the time of filing that the case was about ensuring “merchants and consumers have access to diverse and innovative payment solutions of their choice.”
Shopify, which powers roughly 10% of online retail in the US, rejected this framing. Its motion contends that Sezzle has drawn the competitive boundaries far too narrowly by focusing solely on Shopify’s merchant base, while ignoring what it described as “hundreds of billions in online transactions” where BNPL firms continue to compete freely.
The company also downplayed the complaint’s technical points on checkout design and order management, arguing that these amounted to little more than frustrations over integration preferences. “There is no obligation to design products in ways that advantage competitors,” Shopify’s filing stated.
A hearing on the motion to dismiss is scheduled for December 8, 2025.
BNPL market heats up
The legal manoeuvring underscores the competitive and reputational challenges facing BNPL providers. Earlier this year, Payment Expert reported that Sezzle accused Shopify not only of contract interference but also of spreading “misleading information” about BNPL risk to merchants and consumers.
That claim tapped into broader debates around financial inclusion, consumer protection, and the regulatory status of instalment lending.
While Sezzle and other BNPL firms argue that their products expand access to affordable credit, critics have questioned whether these services encourage overextension among younger borrowers. The Consumer Financial Protection Bureau (CFPB) has stepped back from its 2024 interpretive rule that would have aligned BNPL with credit card regulation, but scrutiny remains high.
At the same time, CFPB research has cast doubt on some of the harsher criticisms, finding repayment rates of 98% and no significant evidence of increased delinquency or debt accumulation among BNPL users. This tension – between perception, regulatory posture, and empirical evidence – continues to shape the battleground where companies like Sezzle and Shopify are now fighting not just for market share, but for control of the narrative.
