The Afterpay Ltd (ASX: APT) share price was the best performer on the S&P/ASX 200 Index (ASX: XJO) in 2020 by some distance.
In fact, the payments company's shares recorded a gain of 303%, which was more than double that of the next best performer – the Kogan.com Ltd (ASX: KGN) share price with a 150% gain.
Why did the Afterpay share price quadruple in 2020?
Investors were buying Afterpay's shares for a number of reasons in 2020.
One of those was the company's exceptionally strong performance during the pandemic. There were fears that the crisis would cause a spike in bad debts and a collapse in sales. However, those fears couldn't have been any more wrong.
Instead, Afterpay benefited greatly from the accelerating shift to online shopping, adjusted its business model slightly (first payment upfront), and continued to grow its sales at an explosive rate without compromising its bad debts.
The company also announced a number of expansion plans. This includes its first foray into mainland Europe, an expansion into Canada, and plans to test the waters in Asia.
What else helped drive the Afterpay share price higher?
Other factors supporting the Afterpay share price include its recent addition to the exclusive ASX 20 and ASX 50 indices and the announcement of new product launches in partnership with Westpac Banking Corp (ASX: WBC).
This partnership will see Afterpay provide Westpac transaction and savings accounts and other cashflow management tools to its 3.3 million customers in Australia from the second quarter of 2021. The company expects the service to empower customers to have greater control over their budget, with an efficient and seamless digital user experience.
Furthermore, the company may not stop at Australia as it sees potential to take this offering globally in the future.
What's next for Afterpay?
While the company could provide investors with an update on its performance during the holiday season in the coming weeks, the next scheduled update isn't until February when it releases it half year results.
Given how far its shares have climbed over the last 12 months, expectations are high. But fortunately for shareholders, Afterpay has a habit of delivering on them and more.
