Sezzle Inc. is opening an office in Toronto to expand usage of its "buy-now-pay-later" payments service by retailers and shoppers in Canada.

The Minneapolis-based financial-technology company first offered its service in Canada in April and subsequently hired marketers to reach out to retailers there. On Wednesday, it added a country manager, Patrick Chan, a former senior executive in PayPal's Canadian office, to accelerate its growth.

"He's going to be the key person for us," said Charlie Youakim, the company's chief executive. "He's a really senior hiring and was on the enterprise-sales team at PayPal for a number of years. He's well connected in the retail space and the payments space there."

The firm is emerging in a niche of the financial industry that provides a way for people without credit cards to shop online. With Sezzle's system, shoppers can split the cost of purchases into four interest-free installments. The firms get revenue from fees collected from retailers. The business is in a high-growth phase, each adding dozens of new retailers by the week to their systems.

Sezzle raised about $30 million when it went public on the Australia Stock Exchange in July. It chose the Australian market to list because alternative payment systems are commonly used in e-commerce there and the nation's investors are more experienced evaluating such companies. Its stock closed Wednesday at A$2.29, down 4 Australian cents.

The firm is racing with several from overseas, including Afterpay from Australia and Klarna from Sweden, in forging relationships with retailers. In the company's third-quarter results, Sezzle's average merchant fee rose, one sign that all the firms were finding plenty of business without resorting to discounting.

"I've not seen any irrational pricing in the industry, which is great," Youakim said.

"These are giants," he added, referring to Klarna and Afterpay. "We're the little scrapper here in Minneapolis, a little bit younger. Everyone's working really hard."

He said Sezzle will take a similar approach to other countries that it did with Canada as it considers expansions.

"We started sales remotely from Minneapolis to see if we could get some traction there," Youakim said. "And then we watched the user behavior and saw correlations that looked very similar to our U.S. growth. So we started to say, 'This is working in the same way,' and started to invest in it."

Evan Ramstad • 612-673-4241