It’s no secret that inflation has been putting a dent in consumers’ bank accounts in 2022, but financial technology (fintech) companies are trying to ease the burden by finding ways to offer cost-effective financial transactions. One of them is the “buy now, pay later” method, allowing holiday shoppers to maximize their spending power.
“Americans are relying on buy now, pay later (BNPL) methods this holiday season amid inflationary concerns,” Mayuranki De noted in a Global X blog post. “Leading BNPL platform Afterpay announced that online and in-person transactions increased 120% compared to the pre-holiday period.”
“Square and Afterpay’s Festive Forecast Report foresaw this trend when one in six Americans reported plans to use BNPL during the gifting season,” De added. “Overall, BNPL usage increased by an estimated 68% in the week through November 27 compared with the previous week. BNPL revenue was up 72% for the same period.”
Getting Broad Fintech Exposure
Rather than opt for single-stock holdings for fintech exposure, there’s an easier way. For broad-based exposure in the burgeoning sector, consider the Global X FinTech ETF (FINX) as an option.
FINX seeks to provide investment results corresponding to the Indxx Global Fintech Thematic Index. The index is designed to provide exposure to exchange-listed companies in developed markets that offer 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.
The fund gives investors exposure to the following:
- High growth potential: FINX enables investors to access high growth potential through companies applying technological innovations to disrupt and improve the delivery of financial services.
- An unconstrained approach: The fund’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
- ETF efficiency: In a single trade, FINX offers access to dozens of companies with high exposure to the fintech theme.
With fintech exposure helping to promote online sales, also consider getting e-commerce exposure with the Global X E-commerce ETF (EBIZ). EBIZ seeks to invest in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and/or selling goods and services online.
“Despite persistent inflation and return to store headwinds, U.S. holiday sales got off to a strong start this year, especially online,” De said. “Compared to 2021, Thanksgiving, Black Friday, and Cyber Monday sales all increased. American consumers spent a record $5.3 billion online on Thanksgiving Day, up 3% over 2021.”
For more news, information, and analysis, visit the Thematic Investing Channel.