The competition in the online financial distribution space is heating up. One of India’s largest payment banks giant Paytm will start distribution of financial products like insurance and mutual funds, said top mutual fund industry officials. Paytm has approached these officials seeking advice on the execution of its financial distribution business.
To start with, the company will focus on distributing direct plans of mutual funds and subsequently move to fee based model, said industry officials.
While the company has received corporate agency license from IRDAI to distribute insurance policies, it is awaiting SEBI’s go ahead to give advice for mutual funds under investment advisor regulations.
In a newspaper report, the company has said that it will set up 'Paytm Money Limited' to provide investment and wealth management services to its users. In fact, the company will invest $10 million (approx. Rs.64 crore) in its wealth management business. This will make it among the best funded start ups even in the history of Indian financial services distribution business.
One97 Communications, more popularly known as Paytm is backed by a Chinese e-commerce giant, Alibaba. It is pertinent to mention here that its promoter Alibaba followed a strategy of deploying the surplus funds of their sellers in liquid funds through their wealth advisory arm Ant Financials (then Alipay), which proved to be a big success. Later, the company expanded their distribution business by offering other mutual fund schemes and financial products.