After almost a year since its formation, Paytm Money, the wealth management division of Indian payments behemoth Paytm on Wednesday announced the launch of its dedicated Mutual Fund investments app on Android and iOS.
Headquartered in Bengaluru, Paytm Money, a wholly-owned subsidiary of One97 Communications Limited is a direct mutual funds investment platform which has tied up with close to 25 AMCs (Asset Management Companies).
The company has also tied up with rating services - MorningStar, CRISIL, and Value Research to ease investment decisions for its users.
Earlier this year, the company received SEBI approval to act as an Investment Adviser (IA) looking to provide both investment advisory and execution services. Paytm Money has already received an investment commitment of $10 million for setting up its operations from its parent One97 Communications Limited.
Before the launch, the platform already has more than 850,000 users registering for early access. Further, 65 percent of these registrations have come from users beyond the top 15 cities of India.
To give a perspective, in FY18 alone, the mutual fund industry added close to 8.32 lakh SIP accounts each month with an average size of around Rs 3,200.
The company states that it will start providing access to users in batches. Over the next few weeks, the platform plans to onboard 2,500 users a day, which will eventually be increased to more than 10,000 users over the next few weeks.
Complete onboarding of these early signups will be finished in the next 45-60 days, said Pravin Jadhav, Whole-time Director of Paytm Money.
Users will be informed about access on their registered mobile number or email address.
Citing the reason for this, Pravin stated, “Considering the demand, we wanted to be completely sure that there are no glitches while onboarding customers. Hence, we chose to give access to users in batches.”
Paytm Money platform claims to be equipped to support close to a million transactions a day.
Pravin also states that the platform aims to have more than a million customers by the end of this fiscal year. Additionally, focusing on the mass retail segment, the company looks to have users from Tier II and Tier III cities invest less than Rs 1,000 on an average, through the platform.
“We expect our users to be investing at least Rs 1000 on a monthly basis across 2-3 funds, through our platform. However, we have no plans of targeting the HNI (High Network Individuals) network and want to stick to retail investing," he said.
Speaking on the launch, Vijay Shekhar Sharma, Founder and CEO of Paytm, said,
“Access to wealth creation opportunities till today has been limited to a select few. With Paytm Money we want to democratise and bring Mutual Fund investments to millions of Indians. We are committed to take the mutual fund investor base in India to 50 million in the next five years and expect Paytm Money to be the catalyst in bringing new incremental investors to this industry.”
Being completely free, the company plans to make money through value-added services on the platform. Pravin adds,
“We are not thinking of monetisation as of yet. Our aim is to provide a good customer experience at the moment. Eventually we do plan to monetise the platform through introducing features like Loans against Mutual Funds along with other value-added services.”
So, how does it work?
Pravin states that the onboarding process on the platform is completely digital. Once users sign up on the platform they are asked for their Pan Card details.
Once uploaded, the platform backed digitally checks it against the IT Dept. records. If the user has already completed their KYC and invested in Mutual Funds, the platform asks them to upload their bank account details and provide two nominations.
In case of a new user, the person is asked to upload his proof of address along with a video for verification purposes.
At present, Paytm Money supports close to 190 banks and allows a user to link up to five bank accounts to the profile. After onboarding, the platform also assesses the risk profile of the customer by asking a series of questions including age, income, dependents, and current portfolio of the user.
Segregating funds based on equity, tax saver, debt and balanced, Paytm Money tries to give users a holistic view stating aspects such as performance (across one year, three years, six years and more), and ratings from (MorningStar, CRISIL and Value Research).
The platform also lists profiles of different fund managers along with the schemes managed by them under various categories. Based on historical data, the app prompts the right date to investors (in a month) when the scheme yields maximum returns. Customers can also set up automatic payment mandates while tracking their returns on one dashboard.
Although it has a goal tracking system, the platform at present doesn’t give user suggestions on where they should invest on the basis of their risk profile and saving aspirations (goals).
What is surprising is that Paytm Money will not have access to data of Paytm’s odd 280 million customers, according to Pravin. Further, considering the interest and registrations, Paytm Money seems to have no plans to tap into its parent’s user base yet.
However, it looks forward to increasing education content on its app for first-time users.
Paytm Money competes with Bengaluru-based brokerage firm Zerodha which launched its direct mutual fund platform Coin last year and has close to Rs 1,100 crore in assets under management.
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