Covid-19 has impacted different companies very differently. One company that has been a surprising beneficiary of the pandemic is payments company Square (NYSE:SQ). Year-to-date, Square stock has surged 225% to record highs.

I say “surprising” here because Square should actually be one of the companies that was hit hardest by the Covid-19 crisis.

After all, Square has built a payment processing empire on the back of consumers buying goods from small-to-medium-sized business in-store. That business has been significantly disrupted by Covid-19. Square should’ve followed suit.

But the company didn’t.

And Square didn’t get disrupted by the Covid-19 pandemic because the payment processing giant has displayed an impressive ability to leverage innovative business expansions in 2020 to not just offset weakness in its legacy point-of-sale payment processing biz, but actually report record growth rates against the backdrop of the pandemic.

Better yet, all of these innovations are still in their early stages — meaning that this innovation-powered surge in SQ stock has runway ahead.

Let’s take a deeper look.

Reason No. 1: Square’s Digital Shift

The first big innovation Square has relied upon in 2020 to drive record growth during the pandemic is a shift toward e-payments processing.

For years and years, Square has dedicated most of its resources to creating point-of-sale payment processors for in-store transactions. But, as Covid-19 shut down physical stores in 2020, Square reallocated its resources to fleshing out digital payment processors for e-commerce transactions.

Early efforts here have paid off. While card-present gross payment volume (or GPV) dropped 5% last quarter, card-not-present GPV rose 24% year-over-year.

Still, Square’s online payments processing business is very nascent — and by the looks of it, has compelling potential to grow into something very big over the next few years. As this young online payments business scales up, it will couple with a rebounding physical payments business in future years to spark supercharged payment growth trends for Square.

Behind these supercharged payment growth trends, SQ stock should continue to outperform.

Reason No. 2: The Cash App Ecosystem

The second big innovation Square has relied upon in 2020 to drive record growth is expansion of its Cash App ecosystem.

Square launched Cash App in 2013 as a mobile person-to-person (or P2P) payments app to compete with Venmo, Apple Pay and Google Pay. Over the past few years, Square has significantly upped investment into its Cash App platform in order to flesh out the service into an all-in-one, end-to-end mobile money ecosystem.

Today, Cash App offers P2P money transfer services as well as stock trading services, an attached debit card with unique “boosts” promotions, direct deposit capability, and do-it-yourself tax filing tools.

The long list of Cash App’s capabilities seems to be growing longer and longer every few months. Extrapolating the current trend out, Square is on track to turn Cash App into the de facto money management app of tomorrow’s cashless world.

Of course, the potential upside therein is enormous — especially once you consider that Square could pair Cash App with its fledgling banking efforts to become the digital bank-of-choice for young consumers.

As Cash App continues to grow and as Square’s banking efforts make headway, SQ stock will keep pushing higher.

Reason No. 3: All-In with Bitcoin

The third big innovation Square has relied upon in 2020 is bitcoin.

Square was one of the first “big money”, mainstream companies to openly accept bitcoin and integrate bitcoin-related offerings into its products. For example, Cash App is widely loved for its ability to buy and sell bitcoin.

The breakout of bitcoin and all cryptocurrencies in 2020 illustrates acceptance of the digital currency as a store of value, and a transaction medium in the modern, digital era. Square’s early adoption of bitcoin bodes well for the company, since consumers now see Cash App as a trusted platform where they can buy and transact with bitcoin.

As the alt currency movement gains momentum in the coming years, it will boost Square’s usage and revenue growth trajectories. Boosts therein will help keep SQ stock on a winning path.

Bottom Line on SQ Stock

Zooming out, SQ stock is a great buy because this is the most relentlessly innovative company at the intersection of the cashless, e-commerce, and alt currency megatrends.

The company’s forward growth prospects are enormously favorable.

So long as that remains true, SQ stock will remain a winner on Wall Street.