Paytm Money targets 20 million MF investors in 3 years, launch in 2 weeks

Vijay Shekhar Sharma, the founder of mobile payments company  Paytm that is soon to launch its mutual fund distribution platform, said Paytm Money has set a target of adding 20 million customers in 1,000 days. As of June quarter, the industry’s folio tally stood at 74 million.

On the sidelines of the Mutual Fund Summit 2018 that was held on Thursday, Sharma said Paytm Money will go live with its app in the next two weeks.

He shared the latest number of signups on Paytm Money app had now crossed 750,000. He added in terms of assets under management, close to 90 per cent of the industry had got empanelled with Paytm Money. However, Paytm Money would want 90 per cent of the 42 players in the industry to sign up. 

Sharma conceded that mutual fund in India is still a push product. He said Paytm Money would also be open to opportunities of working along with the distributor community, including independent financial advisors (IFAs). 

“Paytm Money will largely be aimed at a new, young generation of investors that seek a simple platform for investing their savings,” Sharma said. At the same time, Sharma urged the industry to challenge itself to get a higher share of savings parked in the bank accounts.

He emphasised that Paytm’s intention behind entering the mutual fund industry was to add to the incremental growth of the industry and not to take away anyone's business. 

Sharma gave some glimpses of how Paytm Money could differentiate itself in the future. “We want the transactions to happen instantaneously. Why can't folios open faster and redemptions be settled immediately? Why can't we look at possibilities such as borrowing from banks over short-term to settle redemptions immediately? Why does the investor need to wait for funds to come in?” he said.

Sharma said Paytm Money aspired to become wealth advisor for the small investor, whose daily earning is not more than Rs 1,000.

He warned the industry participants that even one case of mis-selling can impede the industry's growth as that one investor can make many more aware of his negative experience. 

Unlike most MF distributors in India, Paytm Money will be offering low-cost direct plans that don’t charge for distribution expenses. Paytm Money is a registered investment adviser (RIA) with the Securities and Exchange Board of India and will charge a nominal fee for buying funds. 

Paytm Money’s model will bypass distributors that play a key role in hand-holding clients, especially first-time investors. To address the absence of distributors, Patym Money has tied up with third-party MF research firms such as Value Research and Morningstar.