Paytm sets up wealth management unit
Mobile-first financial services platform Paytm on Tuesday announced the setting up of yet another company, ‘Paytm Money Limited’, a wholly owned subsidiary of One97 Communications, the firm that owns the Paytm brand, to build investment and wealth management products for its users.
Paytm Money will be the fourth consumer brand from the company after Paytm, Paytm Mall and Paytm Payments Bank.
The new brand will deal in money market fund where users would be able to store cash and earn interest.
It is already in discussions with leading asset management companies (AMCs) to offer mutual fund investments in direct mode for users. The company plans to initially not charge any fee or commission from users who invest in mutual funds via Paytm Money. However, the company is keeping its plans under wraps and has not yet revealed if it would to set-up a separate app for the services or weave it into the present stack of services provided by the Paytm app. In addition, Paytm has also announced the appointment of Pravin Jadhav as senior vicepresident to lead this new venture. An ex-entrepreneur, Jadhav led product and growth at Servify and Rediff in his earlier roles and was also the founder and CEO of Wishberg. Paytm Money is setting up its operations in Bengaluru and has planned to launch it in the first quarter of 2018, after regulatory approvals.
The company said there would not be any hidden fees or commission. “India will be a mutual fund-first market, we are in discussions with leading AMCs to offer mutual fund investments in the direct mode for our users,” Jadhav said.
“Paytm would the investment advisor, there are no hidden margins or commissions, so the net return on investment is higher. While there are multiple ways Paytm can earn revenues, we are at this point making sure that our investments are in the direct mode. At this point we want to ensure that we are letting investors invest for free. Typically an advisor can generate revenues from advice or transactions or subscription fee,” he added.
The firm is awaiting some approvals from Securities and Exchange Board of India and would start operations shortly after getting the final nod which is still a few weeks away.
“We started as a payments platform and expanded customer offerings to deposits with Paytm Payments Bank. Today, with Paytm Money, we have taken the next logical step in the direction of wealth management. We aim to increase the size of wealth management customer base and bring simple and easy to understand wealth products to our consumers,” Paytm founder Vijay Shekhar Sharma said.