One of the big themes underpinning the fintech boom is the emergence of digital wallets. The ARK Fintech Innovation ETF (NYSEARCA: ARKF) is one of the exchange traded funds most responsive to that trend.
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.
Led by holdings such as Square (NYSE:SQ) and PayPal (NASDAQ:PYPL), ARKF features some of the strongest digital wallet exposure among all ETFs in the fintech category, and that’s important amid buoyant growth expectations for digital and mobile wallets.
“The mobile POS payments are expected to hit over $2bn value in 2020. The impressive growth is set to continue next year, with mobile wallets becoming a $2.5trn worth industry in 2021,” according to Aksje Bloggen.
Square, PayPal, Venmo, and Cash App Leading a New Industry
When it comes to digital wallet exposure, ARKF is indeed dominant. The ARK fund features Square as its largest holding. PayPal and Venmo are also big players.
While Venmo user growth is slowing as Cash App pilfers market share, but user-to-user transactions are soaring.
“Recent years have also witnessed impressive growth in the number of people choosing mobile wallets to manage their payments. In 2017, 298.7 million people all around the world had been using mobile wallets. Over the last three years, this figure soared by 350% to over 1.3 billion. Statistics show the number of users in the mobile POS payments segment is expected to hit almost 1.5 billion next year and continue rising to 1.8 billion in 2024,” notes Aksje Bloggen.
Cash App is rapidly becoming one of the dominant names among financial apps, offering investors startup-like growth. Plus, there’s a runway for international growth.
“China represents the world’s largest mobile wallets industry, expected to hit $1.1 trillion transaction value this year, almost 60% of all mobile POS payments globally. This figure is forecast to rise to over $1.3 billion in 2021,” adds Bloggen. “The United States ranked as the second-largest market globally, with $372.1 billion worth of mobile wallet transactions in 2020, 56% more than a year ago.”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.