To wield dominance in consumer finance space, Paytm will soon start selling investment and wealth management products such as mutual funds through a separate app – Paytm Money.
The Alibaba-backed company has floated an independent company – Paytm Money to offer such services, reports Mint. It’s also investing $10 million upfront in the newly formed entity.
Currently, it’s in the process to get the regulatory nod from Securities and Exchange Board of India (SEBI) to act as an investment advisor for users buying financial services.
With Paytm Money the Noida-based company is ushering into wealth management space. It’s slated to be launched in the first quarter of 2018 and aims to target 200-300 million users.
Paytm Money is being led by Pravin Jadhav who has been working on this product since June 2017, according to his LinkedIn profile. The profile mentions that he has officially joined Paytm in October 2017 as a Senior Vice President.
Previously, Jadhav along with Kulin Shah co-founded Wishberg, a social network to keep track of wishes. The Vijay Shekhar Sharma-backed platform ceased operation in July 2014. After shutting down Wishberg, the founding team joined wallet company Freecharge (now a part of Axis Bank).
Paytm Money is in discussions with leading asset management companies such as HDFC, ICICI, and SBI among others to offer financial products including mutual funds.
Paytm Money is an effort by Paytm to engage users money for more time, and build sustainable loyalty. The company will make money through the deposits users store in their wealth management accounts.
Paytm formally launched its payments bank in November last year. For deposits, Paytm Payments Bank offers 4-7% interest rate on the savings account and up to 7% on a linked sweep out fixed deposit.
Importantly, payments banks are essentially not allowed to lend.
Meanwhile, Flipkart is reportedly planning to sell financial services, insurance, and mutual funds via its affiliate PhonePe.
At present, some of the leading digital lending startups that offer personal loans, credit, EMI and mutual funds products include BankBazaar, ZestMoney, Finomena, and Paisabazaar, among others.