Paytm Money app launched for mutual fund investments, SIPs begin at Rs 100

Paytm Money, a subsidiary of Vijay Shekhar Sharma's One97 Communications Limited, is finally here. The investment and wealth management app offers mutual fund investment products at zero fees and commissions along with up to 1% higher returns. No wonder, it already boasts 8.67 lakh registered users. In fact, the app aims to double the mutual fund investor base in India in the medium term.

"About 50 million investors will be invested in mutual funds by the next three to five years. Of that 50 million, we want to have a majority share, so around 20-25 million people," Pravin Jadhav, whole-time director of Paytm Money told Moneycontrol. Significantly, 65% of the registered users hail from beyond the top 15 cities of the country.

With over 96% early registrations being made from mobile devices, the Bangalore-based company has opted for an app-only approach at its launch. To begin with, Paytm Money has partnered with around 25 asset management companies covering over 90% of the industry's assets under management (AUM) - totalling over Rs 23 lakh crore - to offer direct plans of mutual funds. The latter come with lower expense ratios due to zero distribution fees or commissions. The plan reportedly is to bring all the remaining players on board soon.

Moreover, Paytm Money is offering systematic investment plans (SIPs) for as low as Rs 100 in some of the schemes as it targets individual investors sitting in Tier 2-3 cities. According to Jadhav, customers will be able to buy mutual funds directly from their bank accounts - they don't need to store money in the Paytm wallet. Paytm Money already supports investing from over 190 banks through auto-pay e-mandates, physical mandates and NetBanking.

"Access to wealth creation opportunities till today has been limited to a select few. With Paytm Money we want to democratise and bring mutual fund investments to millions of Indians," Sharma said in a statement, adding that he expects the app to be the catalyst in bringing new incremental investors to this industry.

The icing on the cake? Paytm Money has tied up with leading rating services?such as MorningStar, CRISIL and Value Research to provide users with free analysis of each fund's performance to ease their decision-making process.

Parent One97 has committed an investment of $10 million in Paytm Money, which it plans to invest by the end of this fiscal. The portal added that the funds are being invested in technology, development of products, design, engineering and setting up the entire function.

The Paytm Money app is now available for download on both Android & iOS. The company is initially providing access to around 2,500 users a day and plans to increase this to over 10,000 users daily over the next few weeks after gauzing market reactions.

"We are possibly the only company in investment and wealth management domain that has built the entire technology platform from grounds up. This gives us the capabilities to post transactions in real-time to all AMCs, get faster updates to mutual fund scheme NAVs, show the most updated portfolio value, generate real-time portfolio insights, monitored by real-time reconciliation systems and much more," said Jadhav.

"Our platform is built to handle over a million mutual fund investments per day."

Paytm Money, however, does not have first-mover advantage. It will be vying for eyeballs against the likes of FundsIndia, Sqqrl and Coin by Zerodha.