A grand launch in September, two solid investors in Chinese e-commerce major Alibaba and Japanese conglomerate Softbank, and the platform advantage of a company like India’s leading mobile wallet Paytm*.

And claims like this.

“Higher returns: Get up to 1% higher returns with Direct Plans of Mutual Fund Schemes.”

“Zero Commissions: Pay no commissions or any charges on buying and selling of mutual fund schemes.”

These are the ingredients, one would think, would create the perfect investment app—Paytm Money.

And yet, Paytm Money has a long way to go.

Of the 5600-odd reviews for its Android app from the 500,000+ users who have downloaded it, the average rating is just 2.9/5 stars. On popular question-and-answer website Quora, many threads have been dedicated to the app’s apparent ineffectiveness and lack of a customer service number. A financial services rival even insisted Paytm Money isn’t easy, especially not with fund selection. “It simply pushes forward funds which have done well in the recent past without accounting for risk,” he laments.

That couldn’t possibly help the app in its attempts to capture the online mutual funds market in India. More so because there’s stiff competition out there.

There are existing players such as online discount brokerage firm Zerodha, online investment platforms Scripbox and Fundsindia, Times Internet sponsored ET Money*, the number 2 mobile wallet company Mobikwik which acquired Clearfunds, robo-advisory firm Arthayantra (more on robo-advisory below); plus, recently, a whole host of startups have mushroomed in this space.

“These players have built a certain amount of trust with their clients and that gets deepened if you are in the business for long. Whether or not they will challenge Paytm Money but they will continue to survive because of the specific specialities they have created and their early mover advantage,” says Sundeep Sikka, CEO of Reliance Nippon life asset management.

Assets and Advice

Hyderabad-based Arthayantra provides an end-to-end financial advisory and execution platform for individuals for an annual fee. It charges Rs 1000 annually and offers holistic advice across expenses, liabilities and assets.

But Paytm Money is still trying to pull out all the stops. It has tied up with rating agency Crisil, investment research company Morningstar and another mutual fund research firm Valueresearch Online for fund ratings on the platform. But that may not be enough. These ratings are based on past performance, and achieving a quick a 4-star or a 5-star does not a sustainable rating make. Besides, it cannot be “one size fits all”. Even among good performing funds, there has to be a customisation based on an individual’s requirement.

“Convenience alone does not draw people to a platform.



Vandana is based in Delhi. She covers vertically focussed startups in consumer internet space and also writes on travel tech and smartphones for The Ken. She has spent 13 years in journalism covering a wide range of subjects- equity markets, mutual funds to education and skilling, working at organisations such as Business Standard, CNBC TV18 and The Week in the past.

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