Paytm Money seems to have been generating significant curiosity amongst investors in smaller cities. The company already claims that 65 per cent of users on the platform are from beyond the top 15 cities as it’s witnessing a sharp rise in downloads.
Since Paytm Money is targeting to achieve a customer base of two-crore investors on its mutual fund platform in less than three years, it’s likely to bring many first time investor from tier II and III cities.
Experts also believe that it can bring many first time investors from smaller cities. They say if executed well it can increase flows into direct mutual funds. Unlike regular mutual fund plans, Paytm Money has usually been offering direct plan that gives higher return. This would certainly trigger interest beyond top 15 cities.
Given that the penetration of mutual fund is only 14 per cent, analysts expect that Paytm Money may capture the potential. Currently, it claims to have 8.5 lakh pre-registered users with 9.6 lakh additional users have made requests to get registered on the platform.
Amidst the claims of popularity, user experience with the app hasn’t been great. Several users across Play Store and social media channels have been complaining over time taking KYC process and access limit. However, Paytm had recently extended the user access limit from 2,500 to 10,000.
Although, Paytm is a late entrant in the segment. Several players including Sqrrl, Orowealth, Kuvera, Fincash, Kaleidofin, Goalwise, Scripbox, and ETMoney have been operating in the mutual fund space. Still Paytm has advantages over competitors as it counts user base of over 200 million.
People in smaller cities are still wary of making investment in mutual funds and SIPs through online platforms and app. They have largely been assisted by banks and network of agents. Changing the way people invest in MFs won’t be easy for Paytm Money and its competitor – ET Money.
While people can invest in direct mutual funds with a few steps through Paytm Money, it would be interesting to see whether it would disrupt the MF investment as it did with digital payments.