A Digital Payments Revolution. A Fintech ETF to Join the Ride

The move to digital payments is increasing in speed, providing significant upside for exchange traded funds like the Global X FinTech ETF (NasdaqGM: FINX).

FINX seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Fintech Thematic Index. The underlying index is designed to provide exposure to exchange-listed companies in developed markets that provide financial technology products and services, including companies involved in mobile payments, peer-to-peer (P2P) and marketplace lending, financial analytics software, and alternative currencies, as defined by the index provider.

Data confirm the exponential growth rate of digital payments, one that bodes well for long-term investors considering FINX.

“According to data presented by Finaria, the global digital payments industry is expected to hit $6.6trn value in 2021, a 40% increase in two years,” notes the research firm.

FINX 3 Month Performance

A Fantastic Outlook for FINX

The cashless/digital trend is a boon for FINX components, with stocks such as Square (NYSE: SQ) and PayPal (NASDAQ: PYPL) poised for significant growth over the long-term.

“Large players like Amazon, PayPal, Apple, and Facebook are continually investing significant amounts of money into online and mobile payment solutions. The ongoing development from separate online shops towards integrated online shopping ecosystems has created space for new business models and opportunities for digital payment methods,” according to Finaria.

Increasing the allure of FINX is the fact that digital payments were already growing before the coronavirus pandemic, indicating the crisis isn't needed to drive growth in this space.

Finaria noted that, “in 2017, the entire digital payments sector was worth over $3trn, revealed the Statista survey. By the end of 2019, this figure jumped by 55% to more than $4.7trn and continued growing. Statistics show the global digital payments industry hit $5.4trn value in 2020, almost a 16% increase year-on-year."

"The entire sector is expected to continue its impressive growth in 2021, with transaction value jumping by 22% to over $6.6trn. In the next four years, the digital payments market is set to reach $10.5trn value.”

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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