A Mobile Payments ETF? It Could Be a Very Big Deal

March 4, 2019         By: Steven Anderson

We’ve been talking about mobile payments here for quite some time, tracking the various changes in the market over the years and seeing it wax and wane, rise and fall, and do pretty much everything that any mature market might do. But did you know there’s actually an exchange-traded fund (ETF) out there for mobile payments operations? It’s known as IPAY, the ETFMG Prime Mobile Payments ETF, and some reports suggest this whole concept is looking to make a major mark.

IPAY, the reports note, has been around for the last four years, and is currently valued at around $399 million. It’s the first such ETF that focuses on the mobile payments industry, with a mission to “…capitalize(s) on the transition taking place from cash / physical credit card payments to a mobile / digital system.”

It’s made quite some headway, too; those who invested herein have seen it go up 18.25 percent just over the last year, which outranks the S&P 500 Financials Index by nearly a factor of seven to one. With industry consolidation efforts rapidly boosting this field’s operations, including Fiserv’s recent expenditure of $22 billion to land First Data Corp, it’s made some of the biggest parts of IPAY even bigger.

Fitch Ratings offered some insight into IPAY and the like, saying “… Strong demand for electronic payments capabilities and related technology should support industry fundamentals for merchant acquirers, card processors, network operators, and technology and gateway providers, but large-scale acquisitions may have credit implications.”

We know mobile payments is a growing market, much more so than others, depending on where you look. This is expressed marvelously through IPAY’s performance thus far, and through what we know in general. While there are some signs that mobile payments will only go so far in the US, where much of IPAY’s operation is, there are reasons to believe this will continue to do as well as it already has.

Most would likely love to see 18 percent returns on their money every year, and though IPAY may not do quite that well—and don’t interpret this as investment advice because it is not—it’s certainly a concept to look more closely into.