Six hours ago, a jubilant Vijay Shekhar Sharma tweeted that he was "Very happy to publicly unveil @PaytmMoney today!...Timely upgrade of my business card." With this new launch, Sharma, the founder and CEO of Paytm, India's largest mobile commerce platform, has added yet another notch in his belt. "We started as a payments platform and expanded customer offerings to deposits with Paytm Payments Bank. Today, with Paytm Money, we have taken the next logical step in the direction of wealth management," said Sharma.
So what is Paytm Money? This new entity will focus on investment and wealth management and it hopes to launch its products in the first quarter of 2018. Parent company One97 Communications, which owns the Paytm brand, will reportedly invest close to $10 million upfront to get it going.
"India's wealth management services market has so far focussed mainly on the urban segment leaving a huge chunk of the market untapped," said Pravin Jadhav, who has been roped in to lead this new venture. Paytm Money Ltd, reportedly in the process of seeking regulatory approvals from the Securities and Exchange Board of India, plans to start out by offering mutual funds. "India will be a mutual-funds first market; we are in discussions with leading AMCs to offer mutual fund investments in Direct Mode for our users," he added.
In an interview to YourStory, Jadhav claimed to be in discussions with "almost all 40 Asset Management Companies (AMCs) in the country" but initially, the platform will be available with around 10-12 AMCs, covering close to 70-80% of the industry money. According to him, there are only about 15 million mutual fund investors in the country. So Paytm Money, leveraging on Paytm's nearly 300 million strong customer base, is hoping to expand the pie significantly. "We ultimately want to be the Charles Schwab of India with a zero-fee brokerage," Sharma told Mint in another interaction.
The daily also quoted Sharma saying that Paytm could end up creating a money market fund in the long term just like Ant Financial in China. The latter, Alibaba Group Holding Ltd's financial affiliate, set up its Yu'E Bao fund about five years ago and it is now one of the biggest money market funds in the world. Incidentally, both Ant Financial and Alibaba have invested in Paytm.
With this new company Paytm will also be able to help out its in-house payments bank (PB). The main difference between PBs and traditional banks is that the former cannot directly sell any financial products to customers. But nobody has banned cross-selling financial services in partnership with third-parties, and that's where Paytm Money will enter the picture. A handy source of revenue, we say.
Based out of Bengaluru, the newly-launched venture currently has 40 employees on its rolls but is reportedly planning to go on a hiring spree to take the number up to 200 within the next six months.
It is indeed fascinating how Paytm is evolving so rapidly. From being a pioneer in digital payments, in a short span of time, it is on its way to becoming a full-stack financial services company offering banking, lending, insurance and payments