If you are looking for a new trading account, you need to know the charges levied by the broker. And that is where the traders’ pit blog comes in: it explains the charges and (if possible) how to avoid them.
The brokerage segment already includes Zerodha, Upstox, Groww, Angel Broking, Sharekhan, etc. So, in this post, we will discuss why Paytm chose to enter the brokerage segment and how Paytm money services as compared to other established players.
Also Read: 7 Best Stock Market Discussion Forums in India
Why did Paytm get into stock trading?
Paytm received approval from SEBI to enter the stock market segment in 2019. Paytm has recently tried to establish itself as a one-stop platform for all things money-related.
After demonetization, the online payment platform grew and offered banking products, mutual funds, SIPs, and pensions. It has also acquired Raheja QBE as part of its plan to enter the insurance segment before expanding into discount brokerage.
Paytm’s proposed IPO may come at a very opportune time. NDSL and CDSL opened 2,000 and 12,000 new paperless accounts in April and May, respectively. The curtailment imposed by the COVID-19 pandemic forced the adoption of a home-based work model. As a result, more and more investors are entering the stock market with extra disposable income, as the pandemic has forced them to spend less on holidays.
The markets have also encouraged the entry of new traders, as markets rebounded by more than 45% after a steady decline in February-March. This has benefited new market entrants, making the sector even more attractive. In addition, the additional availability of information in the new environment made it easier for new participants to learn the trade.
However, Paytm Money doesn’t just consider the existing merchant community as a potential customer base. India is expected to have 44 million smartphone users, while only 1.2 million active retailers are currently in the market.
Paytm, which operates primarily on smartphones, will have access to many more untapped markets.
Paytm Money, which has investors from over 98% of PINs in India, will have the added advantage of poor penetration in the country.
Zerodha’s views on Paytm Money
Zerodha, which currently dominates the market with 4 million customers and an 18% share, made a profit of over Rs 1,000 million last year. Speaking about the new competitor, Nitin Kamath, CEO of Zerodha, said,
The biggest challenge to be addressed in India is the development of a capital market ecosystem. Though the number has increased in the last six months, 90 lakh Indians are investing in the stock market. It is possible that another Crore will be released. To live up to that penny, you need platforms with large distribution capabilities. Paytm is one of those that can do it. If anyone in the country can grow quickly, I think Paytm can.
Paytm Money Overview – Delivery, Intraday Rates, and F&O
Here are the referral fees offered by Paytm Money:
- Delivery: ₹0.01 per completed order
- Intraday: At least 0,05% of the turnover or ₹10
- Futures: 0.02% of turnover or Rs. 10/- per order executed.
- Options: 10/- Rupees per completed order
Paytm Money costs:
- Costs of opening a deposit and securities account (one-off costs) : Rs. 200
- Annual maintenance fee (per year): Rs. 0
Paytm MoneyDelivery costs
| Charges | Delivery trade charges |
|---|---|
| Brokerage activity | 0.01 rupees/- for each completed order |
| Facilities for stock exchange operations | 0,00325% of turnover for NSE and 0,003% of turnover for BSE |
| GST | 18% on brokerage and transaction fees on the stock exchange |
| Taxes on securities transactions (STT) | 0.1% of turnover for purchase and sales orders |
| SEBI Rotation Committee | 0.0005% of sales |
| Stamp duty | 0,015% of sales on orders |
Paytm Money Intraday Charges
| Loads | Intraday rates |
|---|---|
| Brokerage activity | 0.05% of transaction or Rs. 10/-. |
| Facilities for stock exchange operations | 0,00325% of turnover for NSE and 0,003% of turnover for BSE |
| GST | 18% on brokerage and transaction fees on the stock exchange |
| Taxes on securities transactions (STT) | 0,025% of turnover for sales orders |
| SEBI Rotation Committee | 0.0005% of sales |
| Stamp duty | 0,003% of turnover for purchase orders |
(Source: Paytm Money transaction costs)
Overview of Paytm Money– Attractive features of Paytm Money
- One of the most attractive features is Paytm’s low price, which is even higher than that of many market leaders. They offer the lowest intraday transaction fees of Rs 10 per transaction.
- The application also provides detailed financial data and stock price history for each listed company, allowing investors to do their own research on the stock market.
- The smart search and notification feature allows users to locate and set alerts for 50 stocks and is alerted when a price is reached.
- An additional advantage of the application is that it allows trading not only in equities and derivatives but also in other investment funds and national pension products.
- The app also includes a built-in calculator that allows users to determine the value of the transaction and the exact break-even price to sell the stock at a profit.
- Users can automate stock investing by setting buy orders on a weekly or monthly basis.
- To make the experience even more enjoyable, advanced graphics and other options such as overlay and bracketing are provided.
- The brokerage fees for segmented futures contracts are the same as for intraday futures contracts. The options broker offers a flat fee of Rs 20 per transaction, irrespective of the number of lots.
- Delivery segments allow you to handle cases that you refer to today another day. There are no additional costs involved unless the sale and purchase take place on the same day.
- Another advantage Paytm offers is data security. Located within the digital walls, Paytm offers absolute data protection to keep investors’ data safe with the bank.
Open a Demat account with Paytm Money?
You can open a demo or trading account with Paytm Money within 24 hours by following these steps:
| Short note |
|---|
| Looking for the best trading account and trading account to start your journey in the stock market? Open your Demat account with India’s leading stockbroker – Join +5 million investors and traders, no brokerage fees when you invest in stocks and mutual funds, instant online account opening without paperwork. Click here to get started now!!! |
- Download the Paytm Money application
- Click on the Complete KYC button and fill in the required information.
- Load the documents i.e. PAN, Aadhaar, and bank details (canceled cheque/statement).
- Submit and you can start trading/investing as soon as your account is active.
Price comparison between Paytm and Zerodha
| Activity | Paytm | Zerodha |
|---|---|---|
| Open an account | Rs. 200 – One-time digital KYC + Rs. 300 for opening an account | Rs. 300 (Inventories and goods) |
| shipment and handling | 0.01 rupees/- for each completed order | FREE |
| Intraday fees | 10 rupees or 0.05% of turnover | Rs. 20 or 0.03% per transaction |
| Fees for futures contracts | 0.02% of turnover or Rs. 10/- per completed order. | 0.03% or Rs. 20 per completed order, whichever is lower. |
| Optional costs | 10/- Rupees for a completed order | Rs. 20/- for each completed order |
| AMC (account management fee) | Rs. 0 * | Rupiah. 300/year + GST |
| Deposits | Rupees. 32 (including fees for custodial operations) | Rs. 60 + VAT. |
| Fees for the services of the Depositary Participant (DP) | Rs. 10/- per share per day | ₹13,5 + GST per copy |
| Payment gateway (Net Banking) | Rs. 10 | Rs. 9 |
| Payment Gateway (UPI) | Rs. 0 | Rs. 0 |
*Paytm charges a platform fee of Rs. 300 per year.
Overview of Paytm Money– Limitations
PaytmMoney Stockbroking and it’s Demat & Trading accounts are still in the early stages and need to be tested for customer feedback and expectations. Anyway, here are some of the limitations that Paytm Money is facing or will face in the future:
- No support for autonomous branches
- Paytm Money does not offer commodity or currency trading services to its customers.
- Unlike popular trading platforms like Zerodha or Upstox, which have been in the market for many years, the Paytm trading platform has yet to prove itself with high volumes and market volatility.
- Advanced control types such as GTC (Good Till Cancelled) are not available.
Final thoughts
By getting into the equity business, Paytm has become one of the most comprehensive wealth management platforms in the country. Their large existing customer base is their biggest leverage, as they have access to a market that other platforms cannot reach. This is reflected in the application, whose user interface is user-friendly and minimalist, reinforcing its approach.
If you compare Paytm with market leader Zerodha, the former makes financial inclusion a priority to satisfy its customers. On the other hand, CEO Nitin Kamath says Zerodha is targeting people who are more than just investors by offering a more sophisticated product.
Frequently Asked Questions
Is Paytm money Demat account good?
Paytm money Demat account is a good option for those who want to invest in mutual funds.
Is Paytm money good for stock trading?
Paytm money is not good for stock trading.
Is Paytm money better than Zerodha?
Paytm money is a digital wallet that allows you to transfer and receive money instantly. It is a mobile app that is available on both Android and iOS. Zerodha is a trading platform that allows you to trade on the stock market.