Why is the Sezzle share price surging 8% on Wednesday?

The Sezzle share price is on the burn today along with the wider BNPL sector.

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Key points

  • The Sezzle share price is well up alongside other ASX buy now, pay later shares today
  • The Sezzle share price is up 256% over the past month
  • ASX BNPL shares appear to be back in vogue 

The Sezzle Inc (ASX: SZL) share price is up 7.55% at lunchtime on Wednesday, with fellow buy now, pay later (BNPL) player Zip Co Ltd (ASX: ZIP) also up by 9.02%.

Other ASX BNPL shares are also well into the green today, including Splitit Ltd (ASX: SPT) up 12.77%.

There's been new momentum in the BNPL space in recent weeks. The Sezzle share price is up — wait for it — 256% over the past month. The Zip share price has gained 175% over the same timeframe. Splitit shares are up 92%, Block Inc CDI (ASX: SQ2) is up 31.64%, and Humm Group Ltd (ASX: HUM) is up 15%.

What's the sizzle on the Sezzle share price?

There is some price-sensitive news out of Sezzle today with a revolving credit facility amendment.

However, the lift in the Sezzle share price likely has nothing to do with this announcement. It simply appears to be a case of the BNPL sector coming back.

To recap, FY22 was the year from hell for BNPL shareholders. As my Fool colleague Brooke reports, some BNPL shares tumbled more than 90%.

Among the elements messing things up for BNPL shareholders were new competition, and concerns that rising inflation and interest rates could curb people's spending and, thus, their use of BNPL services.

The Commonwealth Bank of Australia (ASX: CBAlaunched its StepPay offering and National Australia Bank Ltd (ASX: NAB) launched NAB Now Pay Later. News that Apple Inc may soon launch its Apple Pay Later offering in addition to PayPal Holdings Inc scrapping its late fees also hurt ASX BNPL share prices.

Zip also canned its proposed takeover of Sezzle in early July "in light of current macroeconomic and market conditions".

Are BNPL shares back in vogue?

So what's changed? It's still unclear. Just last week, the Sezzle share price exploded before the ASX called time out to ask the company if it knew why.

In its response, Sezzle said it believes "investors led the increase in trading activity, because of the sector having been significantly down in recent weeks".

So, maybe it's just a simple case of investors deciding BNPL shares are too cheap to ignore now.

Plus, there's been some good news from the main BNPL players recently.

Sezzle shares soared last Friday after the company released its FY22 Q2 update. Sezzle told the market it expects to become profitable in the next six months, which is a huge deal.

Previously, Zip also released a pleasing quarterly update.

Motley Fool contributor Bronwyn Allen has positions in ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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