Explore Top Funds For Payment Company Investors

Fintech is a broad term for any company that applies technology to the world of finance. This includes companies that develop new digital payment-processing solutions and companies that build and operate person-to-person payment applications. As such, there are many funds that invest in payment companies. For example, the Global X FinTech ETF (FINX) launched in 2016 and has $415.58 million in assets under management. The ETFMG Prime Mobile Payments ETF (IPAY) is one of the oldest exchange-traded funds providing exposure to stocks in the payments industry. The Tortoise Digital Payments Infrastructure Fund (TPAY) is another ETF that provides access to the payments space.

Exchange-traded funds (ETFs)

ETFs are considered more tax-efficient than actively managed mutual funds, and they typically have lower operating expense ratios (OERs). They combine the trading versatility of individual securities with the diversified qualities of mutual funds, making them suitable for a variety of investment needs.

• ETFMG Prime Mobile Payments ETF (IPAY): Launched in 2015, this ETF provides exposure to stocks in the payments industry, which is shifting from credit card and cash transactions to digital and electronic methods. It has around 40 stocks in its portfolio, with top holdings including Fidelity National Information and Discover Financial Services.
• Tortoise Digital Payments Infrastructure Fund (TPAY): Launched in 2019, this ETF provides access to the payments space by tracking the Tortoise Global Digital Payments Infrastructure Index, which includes 53 companies that are a prominent part of the global digital payments landscape.
• Global X FinTech ETF (FINX): Launched in 2016, this ETF seeks to invest in companies at the forefront of the emerging financial technology sector, focusing on industries such as insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions. It has around 40 stocks in its portfolio, with top holdings including Fidelity National Information.
• ARK Fintech Innovation (ARKF): Launched in 2019, this actively managed ETF focuses on companies engaged in fintech innovation. It holds a portfolio of between 35-55 stocks with a large-cap bias and has posted positive year-to-date returns.

ETFs provide investors with a diverse mix of asset classes and are widely accessible through online investing platforms and apps, often with commission-free trading. They are a flexible and affordable investment option, combining the benefits of stocks and mutual funds while helping to diversify an investor's portfolio.

Fintech stocks

Fintech, short for financial technology, is a broad term for any company that applies technology to the world of finance. Fintech companies develop software, apps, and hardware solutions to automate and improve financial services for businesses and consumers. This includes online and mobile banking, online and peer-to-peer lending, and person-to-person payments.

Stocks

• Block Inc. (SQ): Formerly known as Square, Block has evolved from helping merchants accept credit card payments to offering a comprehensive financial ecosystem for individuals and small businesses.
• PayPal Holdings (PYPL): The leader in online payments, PayPal also owns the popular Venmo person-to-person payment platform and has made strategic acquisitions and investments.
• Bank of America (BAC): Despite its traditional banking roots, Bank of America has embraced digital innovation and been recognised for its online and mobile banking functionality.
• Adyen (ADYE.Y): Adyen provides payment processing solutions for large businesses, including Microsoft, Uber, and McDonald's.
• MercadoLibre (MELI): Often referred to as the Amazon of Latin America, MercadoLibre has a massive e-commerce business and a rapidly growing Mercado Pago payments platform.

Funds

• Global X FinTech ETF (FINX): This fund invests in companies that develop high-tech platforms to help banks and financial firms digitize their operations, with a focus on digital and mobile tech solutions.
• Ark Fintech Innovation ETF (ARKF): Managed by Cathie Wood, this fund targets companies at the cutting edge of fintech advancement and innovation, including those involved in blockchain and cryptocurrency.
• Capital Link Global Fintech Leaders ETF (KOIN): This fund invests in two distinct areas: financial companies that use fintech, and technology companies that provide the code and hardware for fintech systems.
• BlackRock Future Financial and Technology ETF (BPAY): BPAY provides broad exposure to stocks that create and sell fintech solutions, with a focus on payment processing, cloud-based banking, and insurance risk analysis.
• Fidelity Crypto Industry and Digital Payments ETF (FDIG): This fund focuses on cryptocurrency, fintech, and the payment processing industry, including companies like Marathon Digital Holdings and Riot Platforms.

Mutual funds

• Diversification: Mutual funds offer instant diversification by investing in a wide range of securities, including stocks, bonds, real estate, derivatives, and other assets. This helps to reduce risk and potentially boost returns.
• Affordability: Mutual funds typically have low minimum investment requirements, making them accessible to a wide range of investors.
• Professional Management: Mutual funds are managed by professional fund managers who conduct research and make investment decisions on behalf of the investors. This can be beneficial for those who don't have the time or expertise to manage their own investment portfolio.
• Liquidity: Mutual fund shares can be easily bought or sold at any time, providing investors with flexibility and access to their money.
• Fees and Expenses: Mutual funds charge various fees, such as expense ratios, sales loads, redemption fees, and management fees. It's important for investors to carefully consider these fees as they can significantly impact overall returns.
• Types of Mutual Funds: There are several types of mutual funds, including stock funds, bond funds, money market funds, target-date funds, index funds, and sector funds. Each type has different investment strategies, risk profiles, and potential returns.
• Performance: The performance of mutual funds varies, and past performance does not always predict future returns. However, it's important to consider a fund's historical returns, risk profile, and fees before investing.

Overall, mutual funds offer a convenient and diversified investment option for individuals looking to grow their money over the long term. They are a good choice for those who want exposure to the stock market and other asset classes without the hassle of picking individual investments. By investing in mutual funds, individuals can benefit from professional management, diversification, and relatively low fees.

Digital payments

Fintech, a combination of the words "finance" and "technology", is an umbrella term for companies that apply new technology to financial businesses. Fintech spans digital payments, P2P lending, and online banking, reshaping finance.

• Block (formerly Square)
• PayPal Holdings
• Adyen
• MercadoLibre
• Bank of America

There are also several exchange-traded funds (ETFs) that provide exposure to stocks in the payments industry, which is experiencing a shift from credit card and cash transactions to digital and electronic methods. These include:

• ETFMG Prime Mobile Payments ETF (IPAY)
• Tortoise Digital Payments Infrastructure Fund (TPAY)
• Global X FinTech ETF (FINX)
• ARK Fintech Innovation (ARKF)

Merchant acquirers

The merchant acquirer receives payment requests from payment gateways, contacts card schemes (such as Visa or Mastercard) to request payment authorization, and then passes the payment success or decline message back to the merchant. They also settle funds, minus fees, into the merchant's account.

Some large banks that offer merchant accounts also enable processing, and processors can enable access to merchant accounts through their relationships with financial institutions. Some payment providers, such as SumUp, do not require a contract with an acquirer.

There are several exchange-traded funds (ETFs) that provide exposure to stocks in the payments industry, which is experiencing a shift from credit card and cash transactions to digital and electronic methods. These include the ETFMG Prime Mobile Payments ETF (IPAY) and the Tortoise Digital Payments Infrastructure Fund (TPAY).

Frequently asked questions