Regulatory Landscape Evolution: Strict regulations could be imposed on BNPL products, impacting Sezzle's operational model, fee structures, or marketing practices, potentially increasing compliance costs and limiting growth.

Increased Credit Defaults Risk: Economic downturns, rising unemployment, or increased consumer debt could lead to higher rates of customer defaults on their installment payments, directly impacting Sezzle's revenue and requiring greater provisioning for bad debt.

Intensified Competitive Pressure: The buy now, pay later market is highly competitive with many well-funded players, leading to potential pricing pressure, higher customer acquisition costs, and difficulty retaining merchant and consumer loyalty.