Paytm Money starts broking services

The broking industry is likely to get even more competitive, with Paytm Money starting its stockbroking operations at lower brokerage charges as part of its introductory offer.

The platform was already offering investment in mutual fund products and national pension system products.

Traders prefer the discount broking model, as the brokerage charges are flat, regardless of the volume of trades. Paytm Money will charge ~15 per trade, against ~20 per trade charged by others.

Investors will have to bear ~250 annual charges plus goods and services tax (GST) annually, against ~500 charged by other brokers. The one-time account opening fees would be ~150+GST, against ~300+GST, which is the industry practice.

The digital investment platform, backed by Paytm parent One97 Communications, went live with its stockbroking services on Monday.

Market participants say this could trigger further consolidation in the industry. “After the arrival of discount brokers, brokerage charges were already on the lower side and margins got squeezed. Paytm Money’s arrival will pose challenges for other players to hold on to their market shares,” said G Chokkalingam, founder and managing director of Equinomics Research & Advisory.

“If Paytm Money also offers payment gateway facilities along with broking, it can lead to margin pressure for bank-backed brokers,” he added.

At present, discount broker Zerodha is the largest broking house in the country in terms of active clients.

“With another technology-driven player, which is backed by strong private equity investors, the broking landscape could go through another transition,” said a senior executive at a broking house.