While Silicon Valley moguls try to tout the impending arrival of Web3 and convince the public that cryptocurrencies are worth investing in, India is on track to be one of the globe’s fintech leaders. Through its Unified Payment Interface (UPI), the country is leaping ahead on payments by implementing what crypto boosters have been promising.
UPI is an instant real-time payment system developed by National Payments Corporation of India that facilitates interbank peer-to-peer and person-to-merchant transactions. With more than 150 million monthly users and transactions surpassing $100 billion per month, UPI has become massively popular. The Reserve Bank of India anticipates that payments running through UPI will make up 8% of the country’s total GDP in 2025.
UPI has many things going for it. In addition to working well for large populations, it has an open protocol that other technologies can be built upon, creating a large and useful network for financial payments. Plus, it cuts out intermediaries and encourages greater competition, something blockchain was supposed to do.
“Shiny new technologies such as blockchain may be cool, but less flashy efforts driving open standards and interoperability are delivering a real revolution that flies under the radar of the tech gurus in England’s Shoreditch and America’s Silicon Valley,” according to Fortune. “India is very astutely leaping ahead of the world.”
Part of the reasoning behind UPI was to create a neutral e-commerce platform that was low-cost and accessible. Through UPI, India can reign in the tech firms that are creating monopolies. The Reserve Bank of India has also put limits on market share in UPI payments to foster stronger competition.
Investors seeking exposure to India’s rapidly growing digital and e-commerce sectors may want to consider EMQQ Global’s Next Frontier Internet & Ecommerce ETF (FMQQ) and the India Internet and Ecommerce ETF (NYSE Arca: INQQ). The country is the second-largest exposure in FMQQ and the entire focus of INQQ.
“India is a significant part of our strategies. It’s our second largest exposure in FMQQ with a weighting over 16%,” said Kevin T. Carter, founder and CIO of EMQQ Global. “That is expected to grow in our upcoming rebalance and for the foreseeable future.”
Carter added that India is also “one of the most exciting pockets in global equity landscape when you consider the size of the market, the growth in the economy, and the very low penetrations rates. It’s tech ecosystem today is where China was 10 years ago, and where the U.S. was two decades before.”
FMQQ is designed to provide investors with exposure to the internet and e-commerce sectors of the developing world. FMQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index.
Meanwhile, INQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the India Internet and Ecommerce Index.
Both funds have an expense ratio of 0.86%.
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