Buy now, pay later platform Sezzle (ASX:SZL) has cleared a hurdle with US regulators in the state of California.

The company said this morning that California’s Department of Business Oversight (DSO) has now formally approved its application for a lending license, which it initially applied for in September.

Shares in Sezzle slumped sharply on January 2nd after the DSO accused it of operating an unlicensed lending platform that was in breach of state laws.

The stock then rebounded just as sharply five days later, when Sezzle announced it was working with authorities to resolve the issue.

Investors also cheered this morning’s announcement as the stock gained around 20 per cent in morning trade. It concludes a turbulent period for Sezzle, which listed on the ASX six months ago and operates predominantly in the US market.

 

Previously, the company operated a model where the vendor would extend a non-interest bearing loan to the consumer at the point of sale, which would then be transferred to Sezzle.

But to meet guidelines in the state of California, Sezzle will now issue the loan directly to the consumer under its new lending license. California is the only US state which enforces credit guidelines of that nature for BNPL platforms.

Competitor Afterpay (ASX:APT), which is pushing aggressively into the US market, announced it applied for and received its California license on November 12.

In the Consent Order published on its website, the DSO also announced that Sezzle will be ordered to pay a fine of $US28,200 ($40,889). The company also has 30 days to refund a total of $US282,000 to around 17,000 customers that used the platform before it obtained the necessary licence.

Sezzle this morning called the DSO approval a “great result”, that will allow it to continue executing on its planned growth strategy in the state of California.

 

In other ASX tech news today:

Luxembourg-based Kleos Space (ASX:KSS) announced a partnership agreement with Geocollect, a UK geospatial intelligence and analysis company. Under the terms of the deal, Geocollect will integrate and analyse data collected from Kleos satellites. Once launched, the Kleos satellites will be used to monitor “dark” maritime activity.

The company said actual revenues from the agreement would be dependent on licensing terms “that are variable depending on data access and number of users required”. Shares in Kleos were up 2.7 per cent at 38c, just off 12-month highs.