Users of Paytm’s wealth management vertical, Paytm Money, can now make mutual funds investments on Paytm Payments Bank as well, the company said on Thursday (February 14). Following this integration Paytm bank’s 42 Mn users can make their Paytm Money account as the primary bank account for investment and redemption of the mutual fund.
“With this integration with Paytm Money, we introduce our customers to mutual fund investments and it is in line with our larger goal for financial inclusion,” , Paytm Payments Bank CEO Satish Kumar Gupta said in the the company statement.
Paytm Money recently integrated UPI and net banking options on its platform to facilitate its more than one million users for making investments in mutual funds. The company has partnered with 35 asset management companies of the country, which Paytm Money claims, cover 96% of AUM (assets under management) of the mutual fund industry.
One97 Communications-owned digital payments company — Paytm — launched Paytm Money as a full-stack investment and wealth management company, in September 2018. The Bengaluru company has 250-member team being led by Paytm Money director Pravin Jadhav.
During the launch, Paytm claimed that its wealth management vertical supports investments from more than 190 banks through auto-pay e-mandates, physical mandates and net banking. Paytm founder Vijay Shekhar Sharma expects to add 50 Mn Paytm Money users in the next five years.
Paytm Money sells mutual funds directly to consumers — a low-cost regular plan that eliminates the expense of distributor commissions. This mode of the mutual fund is also adopted by ETMoney, after three years of offering regular mutual funds. In this type of mutual fund, users have to pay commissions to the distributor.
Similarly, there are many Indian startups that cater to this sector, assisting mutual funds investors to make the right choice, away from the confusion created by varied information and vague investment advice. For instance, Bengaluru-based Scripbox uses a quantitative and qualitative algorithm to help eliminate selection biases. Similarly, there are many — Fisdom, Tipbazaar, etc.
Research firm Deloitte India estimates digital investing (using mobile and web application) to grow at more than double the rate of overall investment in mutual funds. It predicts digital-invested AUM to grow by around 80% from approx INR 250 Bn in 2018 to INR 450 Bn in 2019. Paytm Money and its bank’s strategic tie-up has surely raised eyebrows of its competitors.