Paytm eyes license to launch money market fund in India
The country's biggest online payments company, Paytm, is reportedly looking to gain a license that will enable it to launch a money market fund. The fund will help users to store cash and earn interest on it. Reports revealed that the company had applied to the Reserve Bank of India to obtain the license that will increase its reach to over 250 million users.
How are the returns on the deposits?
Although the reports did not suggest any rate of interest, the money market fund is set to offer better returns than the interest rates that are being offered by the banks on savings accounts.
What are Paytm's current offerings?
At present, the digital payments company offers customers the option of trading gold, a business model it had forayed into earlier this year. In January this year, Paytm received approval from the central bank to launch its payments bank. The move enabled individuals and small enterprises to deposit up to Rs. 1 lakh in their account, although it did not resort to lending money.
Is Paytm set to disrupt the financial services market?
With investor backing from global giants such as Alibaba and its subsidiary Ant Financial, Paytm has attempted to follow the success that its investors have chronicled. Barely eight years old, the start-up has gained momentum by foraying into different financial models that look to disrupt the traditional models existing with banks now. It also plans on massive expansion through investments worth nearly $1.6 billion.
