Covid-19 may have brought new meaning to the phrase ‘dirty cash’, which is fueling the need for non-cash payments in the retail point-of-sale market. This works out in favor of the Global X FinTech ETF (FINX).
“According to the new market research report ‘Retail Point of Sale Market by Product (Fixed POS, Mobile POS), Component (Hardware, Software, and Services (eployment & Integration, Support & Maintenance)), End User (Grocery Stores, Specialty Stores, Gas Stations), and Region – Global Forecast to 2026’, published by MarketsandMarkets, the market size [is] to grow from USD 15.8 billion in 2020 to USD 34.4 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 13.9% during the forecast period,” a Cision PR Newswire press release said.
FINX seeks to provide investment results that correspond to the Indxx Global Fintech Thematic Index. The 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.
The fund gives investors exposure to:
- High Growth Potential: FINX enables investors to access high growth potential through companies that are applying technological innovations to disrupt and improve delivery of financial services.
- An Unconstrained Approach: The fund’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
- ETF Efficiency: In a single trade, FINX delivers access to dozens of companies with high exposure to the fintech theme.
- Strong Performance: FINX is up almost 60% within the past year.
Investing in a Cashless Landscape
Social distancing measures have certainly facilitated a need for more non-cash payment options. Whether it’s increased online shopping or cryptocurrency options, the need for non-cash transactions is on the rise and will continue that way for some time as the vaccine rollout continues.
“Growing interest in non-cash transactions among consumers, increased data visibility through cloud POS systems and enhanced service delivery are major growth factors for the market,” the Cision release said further. “Rising penetration of eCommerce platforms, growing interest in POS solutions among small businesses, and strong growth in global retail industry would provide lucrative opportunities for vendors in the Retail POS market.”
FINX’s top three holdings are certainly big names in the non-cash transaction space. Square Inc, Afterpay, and Paypal have all been strong performers the past year.
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