With more government-mandated stay-at-home orders forcing individuals into self-quarantine status, the business of retail must go on. With that, there’s been a considerable rise in the use of financial technology applications to make payments—something that should benefit the fintech space moving forward.
Data is already showing a marked increase in the use of fintech apps in Europe and the rest of the world will more than likely follow in tow.
“The coronavirus has driven a massive 72% rise in the use of fintech apps in Europe, according to new research published today by deVere Group,” wrote Simon Chandler in Forbes. “At a time when most sectors of the global economy are beginning to feel the effects of what may already be a worldwide recession, the sharp jump in app adoption and usage provides encouraging news for the fintech industry. And it comes as yet another indication that the long-term legacy of the coronavirus will be an increasingly digital and online society.”
With the global market still caught amid the coronavirus outbreak, social distancing has changed the way businesses operate logistically and more individuals are relying on payment processing via fintech to conduct transactions.
“The world has changed in the last few weeks,” explains James Green, deVere Group’s Divisional Manager of Europe. “The measures we’re now all taking to help the fight back against coronavirus are affecting the way we interact, live, work, and take care of our finances.”
Payments are increasingly going digital with a number of start-ups seeing venture capital seed money to help facilitate online purchases. According to the research company Pitchbook, data shows that investors put $18.5 billion into the payment processing sector in 2018–an increase of five times the previous year.
ETFs to look at in the growing fintech space include the Global X FinTech ETF (NasdaqGM: FINX) and the ARK Fintech Innovation ETF (NYSEArca: ARKF). ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
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.
For more market trends, visit ETF Trends.