Digital payments company Paytm has announced the launch of two news services—Gold Savings and Gold Gifting—as part of its wealth management offering, Paytm Gold.
The Gold Savings Plan will allow customers to regularly save in gold as per their budget (no minimum amount) and requirement. They can choose the duration, frequency and amount of gold they want to save. The customer’s gold will be stored in MMTC-PAMP’s insured lockers. MMTC is a public sector trading enterprise, and PAMP SA is a Swiss company and a bullion brand.
A blog post by the company points out that customers can get delivery of this gold anytime, but doesn’t go into details of minimum requirements. Originally, if Paytm Gold consumers wanted delivery of gold, there was a minimum purchase requirement of 1 gram and an additional delivery cost. It isn’t clear if this requirement has changed. Users can purchase gold in smaller denominations as an investment, and have it kept with MMTC-PAMP as gold balance. The virtual gold is backed by physical gold, the company had said. The gold can be sold back to MMTC-PAMP, based on the market price.
With the Gold Gifting Plan, customers can now send gold to each other instantly. The company said that more than 60% of Paytm Gold purchases are from tier two and three cities with millennials constituting the majority of buyers.
During its launch in April last year the company had said that more than 232 million households in India own gold and 50% of rural India saves in gold. India is the largest gold consuming country in the world, with over 20,000 tonnes. One advantage the company is pitching is that when bought offline, the price of gold varies city by city while Paytm has a single price.
In future, Paytm will allow users to get a loan by pledging this digital gold.
Paytm’s other recent splashes
Paytm Money, the payments company’s wealth management arm is set to begin operations as soon as the company receives approval from the Securities and Exchange Board of India (SEBI). It was reported that One97 Communications, Paytm’s parent company, will invest $10 million upfront in the newly created wealth management arm.
Last month it was reported that Paytm was closer to offering insurance products on its platform, as its parent One97 Communication Ltd has set up two insurance units: Paytm Life Insurance Ltd and Paytm General Insurance Corporation Ltd. The development was found in the company’s ministry of corporate affairs’ filings. According to the filings, the company’s founder Vijay Shekhar Sharma, and senior executives Shankar Nath and Madhur Deora will be the directors of these units.
In a separate development, the company is reportedly also launching a credit scoring product, Paytm Score, which will find out user’s credit score based on their transactions and payment behaviour. This move is in line with its interest in credit or loan segment.
Remember, Paytm has a payments bank licence, but it is not allowed to give out loans from their own books. It can however partner with other financial institutions to source loans for them.