The global adoption of smartphones and mobile internet paved the way for a  universal mobile payment ecosystem coexisting alongside established ‘offline’ technologies such as  physical credit cards. According to a report by GSMA, the number of registered mobile payment accounts  grew by 12.7 percent globally to 1.21 billion accounts in 2020, and exceeding, for the first time, a daily  transaction volume of over USD 2bn. The report expects the USD 3bn mark to be surpassed by 2022. A  robust outlook for e-commerce and the adoption of digital technologies like open banking payment  solutions provides the foundation for growth in the digital payment market. Legal & General Investment  Management (LGIM) realized the vast potential in this development and expanded its broad thematic ETF  offering with its new L&G Digital Payments UCITS ETF. 

Using a dynamic designed investment strategy, which leverages real-time data on companies engaged in the  digital payments value-chain as provided by Payments Cards & Mobile, the ETF delivers a specialised  portfolio of companies. L&G’s digital payments ETF is based on LGIM’s design process to leverage expert  proprietary datasets and active research, which is systematically and rules-based captured by the Solactive  Digital Payments Index NTR (the underlying index). 

The Solactive Digital Payments Index 

The Solactive Digital Payments Index aims to track the performance of a basket of stocks of companies that  are actively engaged in the digital payments industry and are expected to benefit from the acceleration and  proliferation of digital payments. Eligible companies for the index are selected based on their role in the  digital payments value-chain, classified through the following activities: issuing bank/card issuer, payment  acquirer, payment gateway, payment processor, cardless payment service provider, and payment technology  provider. 

“Both widespread access to the internet and a high smartphone ownership rate are enabling a more seamless shopping experience for customers,” comments Dr. Axel Haus, Team Head Qualitative Research at Solactive. “The upside from these technologies may also potentially benefit business owners via sales  growth, lower transaction costs, and higher transparency. LGIM’s Digital Payments UCITS ETF potentially  benefits from the massive global development in mobile payment, a trend, which we expect to advance further.“