Paytm Money sees half a million users sign up to buy mutual funds
Although Paytm is accepting advance registrations, it has not opened the mutual fund shop to public yet
Mumbai: More than half a million users have signed up to buy mutual funds (MFs) on Paytm Money, which is nearing launch, a top company official said. The digital platform from Paytm Money Ltd, a subsidiary of One97 Communications Ltd, goes live by the end of this month. One97 also owns Paytm mobile wallet, which claims to have 300 million users, and Paytm Payments Bank. Although Paytm is accepting advance registrations, it has not opened the mutual fund shop to the public yet.
“We are testing the app internally with many key employees—they are buying and selling MFs already as we speak—and will be going live very soon. People with early registrations are just invited to register; they will be able to transact once we launch,” Pravin Jadhav, whole-time director, Paytm Money, said in an interview.
Jadhav did not reveal how many fund houses will be present on Paytm Money, but two industry officials said on condition of anonymity at least 15 fund houses have tied up with Paytm Money.
In April, executives from two small fund houses said that Paytm Money was not keen on signing them up in the first phase, despite their interest in the platform. However, Paytm Money seems to have changed its stance since then, with chiefs of two funds confirming, on condition of anonymity, that they have now signed up with Paytm Money.
Jadhav said big or small, once a fund house comes on board, all its schemes will be available for purchase. Those who signed up early will get to start buying first. Paytm Money is expected to enhance mutual fund distribution in small towns, or beyond top 30 (B30) towns, in industry parlance.
Jadhav said Paytm Money will offer only direct plans. All mutual funds offer direct as well as regular plans. While a distributor plan comes embedded with distributor commission (since they are sold by distributors), direct plans do not have distributor commissions and are, therefore, cheaper. Direct plans are meant for investors who want to invest in a fund house directly or go through a Securities and Exchange Board of India (Sebi) registered investment adviser (RIA).
Since Paytm Money is an RIA, it can sell only direct plans. An RIA is allowed to charge fees.
Although Jadhav declined to comment on fee structure, an industry executive said in its initial days, Paytm Money will waive all fees. Yet, it remains to be seen if Paytm Money will be the Reliance Jio moment for mutual funds.
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