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PhonePe expands gold marketplace offering, partners with MMTC-PAMP


Digital payments company PhonePe has announced a partnership with MMTC-PAMP to offer the purchase of gold from within its app. MMTC is Government of India, public sector trading enterprise, and PAMP SA is a Swiss company and a bullion brand. In December last year, PhonePe had partnered with SafeGold to enable customers to buy and sell gold. With the new partnership, the company says it hopes to offer choice in terms of the grade of gold (SafeGold offers 99.95% pure gold vs MMTC-PAMP’s 99.99%) as well a choice of service providers.

In a statement to the press, the company said that customers will have access to live Gold prices that are linked with rates in the commercial bullion market. Gold purchased on PhonePe is physically deposited into a secured vault and is fully insured at all times. If a customer needs the physical Gold, she/he can ask for it to be delivered to their doorstep. There is no mention of a withdrawal/delivery fee or minimum purchase requirement.

A rush towards Gold

Gold marketplaces are increasingly becoming the wealth management offering of choice for payments companies. In April last year, one of PhonePe’s primary competitor Paytm had also partnered with MMTC-PAMP to launch a similar service, Paytm Gold, which allowed consumers to buy gold, which would be stored in MMTC-PAMP’s insured lockers. If consumers want delivery of gold, there’s a minimum purchase requirement of 1 gram of Gold, and an additional delivery cost, users can purchase gold in smaller denominations as an investment, and have it kept with MMTC-PAMP as gold balance.

During its launch, 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.

Last month, Paytm expanded the service with the addition of two news services, Gold Savings and Gold Gifting. 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. With the Gold Gifting Plan, customers can 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. In future, Paytm will allow users to get a loan by pledging this digital gold.

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Meanwhile, traditional investment services such as Motilal Oswal also allow users to buy gold online and also has a partnership with MMTC-PAMP.

Online marketplaces such as Amazon also allows users to buy gold and silver from MMTC-PAMP as well. Other players such as Bluestone also allow users to buy gold coins and bars.

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