New Delhi: The popularity of digital gold is growing, with bullion marketers and payment banks reporting good business.
BMMTC-PAMP has tied up with phone aps such as Paytm to sell the gold to about 1.7 million customers in 2017-2018. The success story has forced Paytm's rivals such as PhonePe to also partner bullion firms including MMTC-PAMP. PhonePe has sold 250 kg of gold. Much of the business is being driven by young investors from the smaller cities.
"This is a new and exciting business vertical for us. We have sold 1 tonne of gold in just one year and added 1.7 million customers who have bought digital gold through apps from us," said Vibhasarin Prabhakar, COO-PVC of MMTC-PAMP, a joint venture between state run MMTC and Swiss giant Produits Artistiques Métaux Précieux, a global bullion brand.
Customers can buy online 24-carat gold through the Paytm platform for any denomination starting from Re 1 and sell their accumulated gold at the latest prices to MMTC-PAMP or physically redeem their digital gold units, subject to a minimum 1 gram. "The gold purchased is set-aside in an allocated enclosure within the MMTC-PAMP vault with full insurance cover and security," said Prabhakar.
"Digital gold possibly became a popular asset class in India as buyers wanted to tap the movement in the bullion market ... however because of cultural factors they wanted to back up their digital gold with actual physical gold instead of just investing in bullion derivatives," said Amit Bannerjee, an independent fund manager.
MMTC managed to sell Rs 120 crore worth of gold through Paytm in just the first six months.
Bullion refinery
MMTC-PAMP has a bullion refinery at Mewat, Rajasthan, the only one in the country with international accredition. It has mostly been doing business with bullion traders and large jewelers, supplying them gold bars and coins of 99.999 per cent purity till now.
"We are now aggressively getting into the consumers space. Digital gold, sale of our products through Amazon and Flipkart as well as stores are part of our portfolio now," said Prabhakar.
