Paytm Money, the wealth management arm of online payments company Paytm, now allows its users to transfer from Paytm Payments Bank (PPB) to buy and sell mutual funds.The integration will benefit around 42 million PPB customers as it allows them to make their accounts the default choice for investment and redemption of mutual fund investments through Paytm Money.
“With this integration with Paytm Money, we introduce our customers to mutual fund investments and it is in line with our larger goal for financial inclusion,” said Satish Kumar Gupta, CEO of Paytm Payments Bank.
As of now the Bengaluru-based Paytm Money accepts payments for buying and selling of mutual funds through 190 banks on its platform. To avail the integration feature, PPB users need to electronically verify their bank accounts.
“We are excited about working with Paytm Payments Bank team to bring the convenience of investing in mutual funds by enabling net banking and UPI for their customers. This is first of many integrations we expect to bring by deeply integrating with the Paytm ecosystem,” said Pravin Jadhav, Whole-time Director of Paytm Money.
Other companies are also entering this space quickly as wealth management becomes a natural extension for payments and brokerage companies. This is on the lines of how leading Chinese players like Alibaba’s Alipay and Tencent’s Wechat Pay have integrated their wealth management into their wallet service.
Flipkart-owned PhonePe launched its own wealth management platform called PhonePe Wealth Services late last year. Mobikwik acquired Mumbai-based online mutual fund investment platform Clearfunds in October last year. Zerodha, which runs an online brokerage firm, also launched Coin in April 2017 to offer similar services.
A mutual funds manager who did not wish to be named said Paytm Money has a good shot in the space because it has a better brand recall than Mobikwik. “My guess is Paytm and Zerodha will be around. They will be a disruptive force — Paytm because they are well funded, and Zerodha because they have a brokerage business,” the fund manager said.
In a bid to increase the user base from the current 1 million, Paytm Money has been making payment methods easier by integrating various options for users. It has enabled many features to improve investing experience for users, like mutual fund investment via UPI, ‘Register SIP Now & Pay Later’, consolidation and tracking of all mutual fund investments.
Paytm Money has partnered with 35 AMCs (Asset Management Companies), covering over 96% of industry AUM (Assets Under Management) of the mutual fund industry. The company claims that more than 65% of investors who initiate their KYC via Paytm Money are first-time investors in mutual funds. Jadhav in an earlier interaction with The Passage claimed more than 70% of such investors come from tier 2 & tier 3 towns.