Paytm has launched its independent investment platform Paytm Money, through which users will be able to buy mutual funds and get advisories for absolutely no charge.
Paytm Money, which has been setup as a separate subsidiary, aims to add 25 million users in the retail investment segment over the next six years. While the company’s payments platform has 90 million transacting users, Paytm Money will remain separate, the company said.
“At this point, even with the industry (MFs) being 25-odd years old, we have just around 20 million investors. The first agenda we have is that this industry should grow to about 50 million investors by 2025, and we want Paytm Money to have half of that share,” said Pravin Jadhav, whole-time director of Paytm Money.
In the run-up to the launch, the firm had opened up access to early adopters and has seen around 850,000 registrations. The firm said it will start by providing access to its service to 2,500 users a day, which will grow to 10,000 in a few weeks.
To achieve its target of single-handedly contributing towards doubling the MF investor base in the country, the company will not charge any fee from users for transactions. Rival Zerodha used to charge customers a fee after their quantum of investments in direct MFs crossed Rs 25,000, but the company has now waived off any charges to promote more people to invest and to use its platform.
Paytm Money will also allow users to invest as little as Rs 100 in certain schemes. The idea is not to make money right now, but to grow the market, said Jadhav, adding that there will be no cap on the amount an individual can invest for free.
This will ensure that apart from first-time investors, seasoned retail investors too migrate to its platform.
Paytm has tied up with 25 AMCs, which it claims cover 90 per cent of all assets under management in the country. Further, it will acquire customers through e-KYC that will simplify the process, reduce costs and speed up the process of bringing new customers to the fold of retail investing.
With an investment of just $10 million from parent Paytm to get the ball rolling, the company is expected to invest a significant amount over the next few years to take on well-funded players such as Zerodha and Scripbox in this segment.
For Paytm, which recently sold a minority stake to Warren Buffett-led Berkshire Hathaway, its investment unit forms the fourth pillar of what users do with their money. The company wants to build an ecosystem around money. While it’s not going for a ‘walled garden’ approach, it certainly is trying to address all the different sectors by itself.
“Right from payments, to spending, to saving, to investing, your ecosystem now gets covered by Paytm. We’ve followed the user by starting with allowing them to make payments easily, then helping them to save, and now Paytm Money fits into the investment part,” said Jadhav.