Digital payments giant Paytm is covering all possible bases to become a one-stop destination for all the digital financial needs of its customers. With this purpose in mind, Paytm has now acquired Bengaluru-based smart savings management startup Balance Technology for an undisclosed sum.
Founded in 2016 by Ankit Kumar and Abhishek Malik, Balance Technology is a personal savings app that enables users to save petty change and invest in fixed deposits and mutual funds.
The startup facilitates financial education and enables product adoption through adaptable goals. Balance Technology was among the seven startups that graduated from the Autumn cohort of Global fintech accelerator YES FINTECH.
Balance Technology’s six-member team has joined the Paytm product and design team and is working on enhancing the company’s user/merchant interfaces. With the acquisition, Paytm expects to leverage Balance Tech’s data-driven insights and track record in building intelligent and elegantly designed products.
Madhur Deora, chief financial officer and senior vice-president, Paytm, said, “We are excited to welcome Ankit, Abhishek, and the Balance Technology team to Paytm. They have created a fantastic product with real user engagement. As we constantly look to create customised and intuitive user experiences, the Balance Technology team will be an invaluable part of this journey.”
Inc42 had recently reported that Paytm Money, the company’s mutual fund distribution platform, has already registered more than 5 Lakh (half a million) users.
Paytm Money has tied up with at least 15 fund houses and will offer their products on its platform. Paytm Money aims to enhance mutual fund distribution in small towns, or beyond the Top 30 (B30) towns, in industry parlance.
Ankit Kumar, CEO and co-founder, Balance Technology, said, “Our team has been building automated products that make the saving experience relatable and delightful by helping users reach their goals in clever little ways. Our conversational personal savings assistant nudges users to build a saving habit and gives purpose to their money as they go about their busy lives. We look forward to bring in computational intelligence, unique design, and proprietary algorithms with Balance to help Paytm users accomplish more with their money.”
How Does Balance Technology Enable Savings?
Once you install the Balance app, a chatbot introduces you to the app interface and urges you to take the first step towards saving money by setting up a goal.
A goal can be anything that you want to do with the money saved; the bot gives you options such as travel, purchase of a vehicle, among others, to choose from. You can set up the goal and then move on to the next step of how to save.
The Balance app interacts with its users according to the inputs provided by them, with pre-programmed recipes (for saving) and savings mechanisms in the app.
At present, the company offers six savings recipes built around a person’s life, turning everyday activities into saving opportunities. These include Roundups, which stacks up your savings with loose change from every transaction; Football Fans, which allows fans to save every time their team wins; Health & Fitness, which is linked to the Google Fit app and enabled users to save every time they hit their daily goals for step count.
However, the company only enables users with Zerodha’s trading platform Kite and auto-debits the savings from their Demat accounts created on the platform.
Customers can withdraw their savings directly from their Kite account.
At presnt, the app UX says that the company will soon add other banks to its platform.
Paytm: Expanding Its Portfolio
Paytm claims it has achieved an annual run rate of 5 Bn transactions and $50 Bn in gross transaction value (GTV) which as a result of the phenomenal adoption of its services in Tier 2 and Tier 3 cities.
The company recently partnered with SoftBank and Yahoo Japan’s newly launched digital payments company PayPay to expand to Japan. PayPay will leverage Paytm’s technology and expertise in mobile payments. The services will be launched in the fall of 2018.
Paytm has also started offering forex services for the top 20 international currencies. It may also enter cross-border remittance services.
Here’s a look at Paytm’s acquisitions:
- The company was reportedly looking to acquire Noida-based last-minute hotel booking app NightStay for around $20 Mn
- In May, Paytm acquired Chennai-based online ticketing platform TicketNew to boost its entertainment arm
- In September 2017, it was in talks to acquire Bengaluru-based O2O deals platform Little and Gurugram-based Nearbuy
- In July 2017, Paytm also acquired a majority stake in Insider.in, an events ticketing platform, to tap into the rapidly growing live entertainment space in India
- The company also acquired Cube26, a New Delhi-based artificial intelligence startup, in June this year
Wealth Management In India
According to the IBEF, the mutual funds (MF) industry in India has seen rapid growth in its total assets under management (AUM).
The total AUM of the industry increased 25.79% year-on-year to hit a record high of $ 342.91 Bn (INR 22 Lakh Cr) at the end of February 2018. At the same time, the number of MF equity portfolios reached a record high of 2.27 Bn in the same month.
As of April 2018, the four key metros — Delhi, Mumbai, Bengaluru, and Chennai — were expected to see revenues worth $7.2 Bn generated annually through increasing payments in the digital mode. This indicates the rising opportunity for the online wealth management industry in India.
Some of the other players in the industry include Fisdom, a personal wealth management startup; WealthTrust, a wealth management application; Tauro Wealth, a stock market investments platform, Tipbazaar, and Scripbox.