One97 set to launch wealth management arm Paytm Money with Softbank funding

Softbank-backed Paytm has now set up Paytm Money, which will offer investment and wealth management products.

Paytm Money Ltd will be a wholly-owned subsidiary of One97 Communications - the parent firm of Paytm. This is its fourth venture following wallet, e-commerce, and payments bank. The parent company will invest $10 million in the entity this year.

It will be available as a separate mobile application to users, said Vijay Shekhar Sharma, founder and chief executive of One97 Communications.

Paytm Money is in the process of seeking approval from the Securities and Exchange Board of India to act as an investment advisor. To start with, it may offer mutual fund products to users.

Currently, the operations are being set up in Bangalore and the venture will be launched before March following regulatory approvals.

Pravin Jadhav, a former entrepreneur, who led product and growth at Servify and was the founder of social media platform Wishberg, has been hired as the senior vice president and will head the new business.

Sharma said that the aim will be to increase the size of wealth management customer base and bring simple and easy to understand wealth products to the consumers. ''We ultimately want to be the Charles Schwab of India with a zero-fee brokerage,'' he added.

Earlier this year, Paytm launched its payments bank, a mobile-first bank with zero charges on all online transactions and no minimum balance requirement.

Jadhav said that the company is in discussions with leading asset management companies to offer mutual fund investments in direct mode adding that the company will also focus on the non-urban markets.

''India's wealth management services market have so far focused mainly on the urban segment leaving a huge chunk of the market untapped. I am excited to join Paytm Money to build the most consumer-friendly investment product and experience for investors,'' Jadhav said.

Experts have raised concerns over the business model of payments banks and how it would be difficult for these banks to make money as they are not allowed to lend. Synergies between Paytm Money and the bank could help solve that problem for Paytm.

Paytm Money seems to be an attempt by the company to find more ways of keeping user money with Paytm and build customer loyalty for the long term, according to Mint.