When it comes to fintech stocks and exchange traded funds such as the ARK Fintech Innovation ETF (NYSEARCA: ARKF), investors frequently hear about how digital and mobile wallets are revolutionizing finance.
Data confirm there’s credibility on that front, as more and more consumers and shops move away from cash.
“According to data presented by Finaria, mobile wallets are set to become a $2.4trn worth industry this year, growing by a massive 24% year-on-year. The strong rising trend is forecast to continue in the following years, with the unified market reaching $3.5trn value by 2023,” according to the research firm.
The fintech industry is upending traditional financial services on multiple fronts. One of the cornerstones of that disruption is digital wallets. That disruption is being seen at the point of sale (POS) level.
“Mobile wallets wiped out the need for carrying money while reducing the chances of theft or losing currency. They allow payments by passing a smartphone app over a merchant’s payment terminal. Data transfers are made via wireless standard Near Field Communication (NFC) or by scanning a Quick Response (QR) code to trigger an online bank transfer. ApplePay, Google Wallet, WeChat Pay, and AliPay lead this market,” adds Finaria.
ARKF: At the Center of the Mobile Wallet Explosion
Cards and digital payments are slowly, but surely usurping cash as primary forms of payment, providing a compelling, long-term runway for growth for ARKF investors. The time could be ripe for fintech names to push into more traditional banking services, potentially stealing market share from their slow-growth rivals.
What does the future hold?
“In 2020, the mobile POS payments market hit a $2trn benchmark, driven by a surge in digital payments amid the COVID-19 outbreak. Statistics indicate transaction value is expected to jump by half a billion in 2021, showing a 107% growth in two years. By 2023, mobile POS payments are forecast to grow by another 40%, and by 2025, the unified market is set to reach $4.6trn value,” concludes Finaria.
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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.