Seeking to go beyond its traditional wallet offering, Alibaba-backed digital wallet firm Paytm has forayed into wealth management with Digital Gold, which allows users to buy, store, and sell gold on their smartphones.
The Noida-based company, run by One97 Communications Ltd, has collaborated with precious metals processing facility MMTC-PAMP India, a joint venture between bullion refinery PAMP SA Switzerland and public sector metals firm MMTC Ltd, to launch Digital Gold. Customers can buy 24 karat gold from MMTC-PAMP.
Under the programme, users can buy and sell gold for as little as Rs 1, after which it will be stored in lockers run by MMTC-PAMP. Users can also get the gold delivered to their homes as minted coins or they can sell it back online instantly.
“Gold is the preferred form of investment for Indians, and we are making it easier for our users to invest in gold digitally. With this product, our customers can buy and sell international quality gold at market-linked prices instantly. The goal is to offer complete flexibility in deciding the amount they want to invest, and enable consumers to develop habit of saving regularly in digital gold for long-term wealth creation,” Vijay Shekhar Sharma, founder of Paytm said at a press conference. He declined to give details on the firm’s launch of its payments bank.
Indians currently hold more than 24,000 tonnes of gold worth $900 billion as per World Gold Council estimates. Indian households bought more gold in 2016 than any other financial asset despite the challenges of buying pure gold and storing it.
On Wednesday, markets regulator Securities and Exchange Board of India (SEBI) allowed investors to buy mutual funds through digital wallets.
Besides its payments wallet, Paytm has created two separate entities, Paytm E-Commerce and Paytm Payments Bank Ltd, to run its e-commerce and banking services, respectively. In December 2016, the firm announced that it was merging its wallets business with its payments bank, as per directives issued by the Reserve Bank of India.
In March this year, Chinese e-commerce major Alibaba invested $177 million (Rs 1,182 crore) in Paytm E-commerce. Paytm’s existing investor SAIF Partners also backed the firm in this round, taking the total investment to $200 million (Rs 1,334 crore). The investment increased the stake of Alibaba and its affiliate Ant Financial (the parent company of Alipay) in Paytm E-Commerce from 40% to 62%.
Last week, Japanese Internet conglomerate and investor SoftBank Group was reportedly in talks to invest $1.2-1.5 billion in Paytm.
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