Barring a terrible finish to the month on Tuesday, the Afterpay Ltd (ASX: APT) share price will record a very strong gain in June.
Month to date, the payments company's shares are up an impressive 20%.
Why is the Afterpay share price surging higher?
Investors have been buying Afterpay's shares this month following strong updates from its rivals and an equally positive update on its UK business.
In respect to the latter, earlier this month Afterpay revealed that its UK-based Clearpay business now has over 1 million active customers using its platform. This is just one year after launching in the country and makes the Clearpay business one of the largest of its kind in the European market.
The good thing about its increasing customer numbers is that it makes the platform more appealing to merchants. In light of this, it will come as no surprise to learn that Afterpay reported a sizeable increase in merchants on its platform.
There are now more than 1,100 brands and retailers offering, or in the process of offering Clearpay to their customers in the UK. Recent additions include Bare Minerals and ISAWITFIRST. They join the likes of ASOS, Marks & Spencer's, JD Sports, and Boohoo on its platform.
Positively, I believe the wider adoption by merchants will be supportive of further customer growth in the future, allowing Afterpay to quickly entrench its position.
Another positive was that the company advised that its customer purchasing frequency in the UK is outpacing the United States at the same stage. Afterpay's UK customers are transacting more than 8 times per year, compared to six times at the same point following its United States launch.
Afterpay co-founder, Nick Molnar, spoke positively about current trading conditions.
He said: "The world and the industry are changing at a rapid pace, and during this challenging time consumers are looking for ways to pay using their own money – instead of turning to expensive loans with interest, fees or revolving debt."
Is it too late to invest?
I don't believe it is too late to invest if you're planning to make a long term investment.
I'm confident Afterpay is on its way to becoming a real force in the payments industry and feel its shares could generate strong returns for investors over the 2020s. Especially if it successfully expands into mainland Europe and Asia.
