Paytm, run by One97 Communications Ltd, has set up a new entity called Paytm Money Ltd that will offer investment and wealth management products and will invest close to $10 million upfront in the new entity.
Paytm Money is the fourth product from One97’s stable after Paytm Mall, Paytm Payments Bank and Paytm wallet; it will be available as a separate mobile application to users, said Vijay Shekhar Sharma, founder of One97 Communications.
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. Paytm Money will be headed by Pravin Jadhav as senior vice-president. Paytm Money currently has a 40-member team working out of Bengaluru and is looking to add another 150-plus people over the next 12-18 months.
Paytm, which also has a payment bank, could make money through the deposits customers keep in their wealth management accounts. 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 bank could help solve that problem for Paytm.