Sezzle shares surged as much as 30 per cent after its monthly update showcasing a push towards profitability, but the gains soon halved as investors realised competition in the US buy now, pay later sector remains cutthroat.

Zip shares, up 80 per cent in the past month, also jumped after the Sezzle update, trading 6 per cent higher before returning to earth to end 2 per cent lower at $1.05. It releases its full-year results next Thursday. About 10 per cent of Zip stock has been sold short.