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Why the Afterpay (ASX:APT) share price continues to dominate

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The Afterpay Ltd (ASX: APT) share price performance continues to beat its buy now, pay later competitors. Its shares are within 5% of its previous record all-time high of $105.80 per share.

This compares to the likes of Zip Co Ltd (ASX: Z1P), Sezzle Inc (ASX: SZL), Splitit Ltd (ASX: SPT), Openpay Group Ltd (ASX: OPY), Laybuy Holdings Ltd (ASX: LBY) and Humm Group Ltd (ASX: HUM) that are all more than 30% below previous highs. So, why is this the case? 

Laybuy and Zip flat on trading updates 

It seems like the glory days where BNPL shares would rocket up on any type of announcement are long gone. The Laybuy and Zip share prices are flat after both updated the market with growth in November.

Laybuy announced a 200% year-on-year increase in gross merchandise value (GMV) of NZ$61 million while Zip announced record transaction volumes in November of $577.1 million, up 44% on October and more than 100% YoY. Despite what reads like a good November update, the Zip share price is down 0.50% and Laybuy share price is up only 1% at the time of writing.  

How is Afterpay different?

International expansion and key partnerships are the main differences between Afterpay and its competitors. 

On 20 October, Afterpay became the first BNPL to form a partnership with a big four bank. The partnership will allow Afterpay to provide Westpac transaction and savings accounts and other cash flow management tools to its 3.3 million customers in Australia in the second quarter of FY21. 

Furthermore, Afterpay is one of the only BNPL companies to have multiple planned expansions. The company launched into Canada in August with a number of large merchants now live, integrating or signed. 

Its acquisition of Pagantis in Europe remains subject to approval from the Bank of Spain. The company calls this acquisition a “key step in our efforts to be a truly global business”. Pagantis provides an opportunity to launch into Spain, France and Italy immediately and to potentially enter other countries in the European Union.

Afterpay also established a base in Singapore to drive the development of a strategy for the Southeast Asia market. 

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Returns as of 6th October 2020

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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