The New Product Will Allow PhonePe Customers To Buy And Sell 24 Karat Gold Digitally Via Its App
Flipkart-owned digital payments platform PhonePe has forged a partnership with SafeGold to launch a digital gold product. As per the official statement, users will now be able to buy and sell certified 24-karat gold via the PhonePe app.
The development comes nearly eight months after rival Paytm unveiled a similar product in April this year, in collaboration with MMTC-PAMP.
As stated by Gala, IDBI Trusteeship Services will be acting as the trustee bank to protect the interest of customers with regard to their gold purchases. IDBI Trusteeship Services is jointly promoted by IDBI Bank, LIC of India, and GIC of India
Commenting on the development, Subrat Udgata, Vice-President of IDBI Trusteeship Services stated “Gold has always been a prized possession in India. We are delighted that an innovative company like PhonePe in partnership with SafeGold, is offering customers a convenient and secure way to buy or accumulate the best quality Gold. It is noteworthy that there are independent entities in this partnership protecting the customer’s interest at all stages. We are actively supporting such innovative digital business models as Trustees and the SafeGold-PhonePe partnership is an example of that effort.”
A Bit About PhonePe’s Digital Gold Product
With the launch of the new product, PhonePe customers will get the opportunity to buy gold worth any amount, even as low as INR 1. To be able to do that, users will have to first create a PhonePe Gold account on the app and monitor Live Gold prices before making the purchase.
According to the company’s spokesperson, all gold prices will be linked with the rates in the commercial bullion market.
Gold purchased on PhonePe is physically deposited in a high-security Brink’s 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.
Speaking at the launch, Hemant Gala, Head of Bank Relations and Strategic Partnerships at PhonePe said, “We are thrilled to announce the launch of PhonePe Gold. Now millions of PhonePe customers will be able to buy 24-karat gold securely at the click of a button. Best of all, thanks to our strategic partnership with SafeGold, we are not just selling digital gold. We are selling real physical gold that can be delivered to consumers when and where they need it. We believe the PhonePe Gold category will help grow online sales of physical gold exponentially over the next few years.”
SafeGold: An Overview
SafeGold is a product of Digital Gold India, a company that focusses on using technology to improve transparency and efficiency in buying gold. As per sources, SafeGold has already integrated its platform with PhonePe to allow customers to buy and sell the precious metal digitally.
Once the purchase is made, SafeGold will dispatch the gold coins that are Assay Certified, which is an accreditation to prove the purity and legitimacy of precious metals. The gold is finally delivered to customers in tamper-proof packaging.
“Online purchase of gold is still a nascent yet fast-growing market in India. We believe our exclusive online partnership with PhonePe will help us in accelerating the pace of pace of online sales of gold in India. The focus is on driving mass adoption at affordable ticket sizes. SafeGold structure is in line with global best practices that puts a premium on protecting consumer interests,” stated Gaurav Mathur, Managing Director of SafeGold.
Flipkart Owned PhonePe: Vital Stats
Headquartered in Bengaluru, Flipkart-owned UPI app PhonePe boasts over 55 Mn installs. It claims to have processed over 1 Mn daily transactions worth over $15.4 Mn (INR 100 Cr) every day in November.
The app has achieved a total payments volume (TPV) annual run rate of $6.1 Bn (INR 40,000 Cr) within 14 months of its launch. The company is targeting to double this metric by March 2018.
The company also recently announced that the monthly transactions on the app have grown 8200% since November last year, driven by exponential growth in its online merchant, bill payment and peer to peer transactions.
PhonePe recently introduced a number of new categories like Credit Card Bill Payments and Gift Cards in its mobile app, and integrated over 60K online and offline merchants in categories ranging from movie tickets, food delivery, pharmacies, groceries, travel and petrol pumps where customers can pay their bills using UPI, wallets, credit and debit Cards.
It also announced the launch of a Point of Sale (POS) device, the first such product in the Indian digital payments space, and is said to be the ‘lowest cost’ PoS device in the world priced just $10. Earlier in October, PhonePe had received a $500 Mn funding boost from its parent firm Flipkart. Prior to that, Flipkart had also invested $38.7 Mn in the company.
As per an estimate by the World Gold Council, Indians currently possess over 24,000 tons of gold worth up to $900 Bn. At a time when the Indian digital payments space has become the hotbed of intense rivalry, as a result of the entry of new players like Google, PayPal and others, companies like PhonePe and Paytm are gearing up to push revenue growth through the launch of new products and services. With the digital gold product, Flipkart-owned PhonePe is looking to capitalise on the country’s enormous gold market by facilitating convenient, digital purchases.