Home » Internet » On Akshay Tritiya, Paytm Launches World’s 1st App-based Digital Gold Product!
Last updated: April 28, 2017 at 13:58 pm

On Akshay Tritiya, Paytm Launches World’s 1st App-based Digital Gold Product!

Paytm Digital Gold

Two very big news have emerged from the Paytm, which can have far reaching consequences on the overall fintech market in India.

While Softbank is all set to infuse $1.9 billion into Paytm, which will raise its valuation to $9 billion; on the occasion of Akshay Tritiya, Paytm has launched world’s 1st mobile wallet based Digital Gold scheme.

Now, Paytm users can buy Gold for as little as Re 1 and use the purchased Gold for wealth management as well.

App-Based Digital Gold & Wealth Management From Paytm

For the first time ever, anywhere in the world, Paytm has launched a unique Gold based investment and wealth management product called Digital Gold.

This new offering has been created in partnership with MMTC-PAMP (which is India’s first and only LBMA Good Delivery refinery accredited for Gold and Silver).

Using Digital Gold, Paytm users can now buy Gold for as low as Re 1, and then can store, and sell the Gold. In fact, the Gold purchased can be used to carry transactions such as buying movie tickets or e-commerce shopping.

Paytm founder Vijay Shekhar Sharma said, “Gold is the preferred form of investment for Indians, and we are making it easier for our users to invest in gold digitally… and making it affordable for a wider set of customers..”

In a way, Paytm wants to liquidate and digitalize 24,000 tonnes of Gold which Indians have right now, worth $900 billion. Once the Gold is purchased, its physical form would be stored with MMTC, and if the user wants, it can be converted into jewellery as well, in association with leading jewellery makers, such as Tanishq.

Mehdi Barkhordar, chairman at MMTC-PAMP India said, “Our partnership with Paytm provides every Indian access to high quality, 24k 999.9 pure gold in a convenient and transparent manner,”

How Will It Work?

Paytm Build Gold

Say, you have bought 100 gms of Gold on your Paytm account, whose worth is Rs 2.8 lakh (22 carats Gold, Delhi price as of today). The physical form of this gold would be stored with MMTC.

Now, you want to purchase a TV from Paytm’s e-commerce portal, whose value is Rs 20,000. You can use the Digital Gold money to pay for this transaction. Now, you have the remaining value of Rs 2.6 lakh.

Sharma said, “This is the beginning of wealth management at Paytm”, adding, “Think of it as a simple Gold Bank account, which can be used to more commerce on the platform..”

Next month, say, you want to gift your daughter gold ornaments. This digital gold would be transferred from your account to Tanishq’s account, digitally. Now, Tanishq will send that digital gold to MMTC, which gives them gold bars in physical form. Tanishq will now use the physical gold and create ornaments for you.

A source from Paytm said, “It is a win-win for all three — the jeweller, Paytm and MMTC. We are looking at different ways to engage with jewellers and buyers, and other online and offline platforms.”

And, reports are coming in, regarding an investment of $1.9 billion (Rs 12,000) crore by Softbank into Paytm, at a valuation of $9 billion. If this investment happens, then it shall be the biggest VC based capital raising by any Indian e-commerce, ever.

It will easily overshadow Flipkart’s recent funding of $1.4 billion by Tencent, Microsoft and Ebay.

As per reports, Softbank may acquire 20% stake in Paytm, after this investment.

We will keep you updated as more details come in..

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