UTI MF, Quantum MF, Sundaram among players planning to facilitate investments through visa enabled debit cards
Mumbai: The trend of allowing investors to invest through their debit cards has caught on big time with fund houses. Fund houses like UTI, Sundaram and Quantum are soon planning to facilitate investments through visa enabled debit cards after Fidelity MF and ICICI Prudential started this facility recently.
DSP Black Rock MF already enables investors to invest through debit cards on its website. SBI too has enabled buying through its SBI debit cards since last year. “We provide investments through all SBI visa enabled debit cards. We don’t see huge volumes on these transactions,” said Srinivas Jain, CMO, SBI MF.
Reliance MF currently allows its investors to redeem at any visa enabled ATM in its Reliance Regular Savings Fund. It had launched its own ATM cum debit card (Reliance Any Time Money Card) in association with HDFC Bank and VISA.
Last week, Fidelity MF introduced a service by tying up with 27 banks, in addition to 39 banks through which it currently allows buying schemes online. “By allowing Visa Debit card holders to make purchases through Fidelity online, we have taken the next step in enhancing customer choice and convenience. We are now able to give our investors greater ease in managing their Fidelity portfolios. This facility is available to all customers including advised customers,” said Ms. Ashu Suyash, Country Head-India for Fidelity International.
Both Fidelity and ICICI currently allow investors to make lump sum investments only.
ICICI MF started this facility from 14 June 2011. It has enabled this facility for investors across India in association with the ICICI Merchant Services powered by First Data, an online payment service provider across 40 banks.
The funds can be bought through its website. ICICI MF plans to introduce Visa PoS (Point of sales) terminals in seven cities including Mumbai, Delhi, Chennai, Kolkata, Bangalore, Pune and Ahmedabad which will facilitate investments through a debit card swipe.
"By providing value added services like visa debit transaction facility, our endeavor is to offer our investors easy accessibility and convenience. Going forward, we will continue to launch such investor focused initiatives that will provide investor convenience and increase reach of mutual funds" said Nimesh Shah, MD & CEO, ICICI Prudential MF.
Fund houses have to initially incur a onetime cost of setting up the infrastructure after which they have to bear the ongoing costs of transactions. It is estimated that AMCs cough up anywhere between Rs 50 to Rs 70 on each transaction depending on the volumes and service provider.
Fund companies can charge these costs to the scheme too, provided it falls under the purview of SEBI stipulated expense ratio of 2.50% for equity schemes.
According to sources, UTI MF tested this network a few years back but deferred the launch due to high costs. The fund house is now looking to start it soon as it has the entire infrastructure in place now. Among other fund houses that plan to offer this facility are Quantum and Sundaram.
“We are planning to launch it within a month and we do not propose to charge the transaction costs to the scheme,” said Jimmy Patel, CEO, Quantum Mutual Fund.
Sunil Subramaniam, Director-Sales & Marketing, Sundaram MF confirmed plans to launch this facility.
