Paytm users can now convert their cashbacks into digital gold

Online wallet company Paytm will now allow its over 250 million users to receive cashbacks on any transaction in the form of Paytm Gold.

The cashback in the form of gold savings can be bought at a denomination of as low as Re 1, and will be stored in physical form in bullion trading partner MMTC-PAMP’s 100 percent insured lockers, for free.

These can later be liquidated into solid gold, which will be delivered at the user’s doorstep, or it can be resold to MMTC-PAMP to get the proceeds in the bank account.

The gold products available on Paytm are sourced and stored from MMTC-PAMP, which is a JV between Swiss precious metals refiner PAMP SA and government-owned metals trading company MMTC.

Under the arrangement, the gold sold on Paytm is sourced from and stored in vaults maintained by MMTC-PAMP.

Paytm is now working on a model where users can pay for a piece of jewelry with the gold deposits, or gift it by transferring the balance to another account through the app.

"We are in talks to tie-up with jewellers at this moment. We will announce something soon,” Krishna Hegde, senior vice president of Paytm said.

Launched in April, Paytm Gold has already sold 175 kgs of gold across 8,000 pin codes.

According to Hegde, close to 1.5 lakh customers have bought gold on Paytm since its launch, and the company is witnessing a 150 percent month-on-month growth in sales volumes, number of users, and number of transactions across the country.

“The point behind introducing this service is that it reaches maximum number of people. Those who start saving in gold through this feature can be a potential buyer of Paytm Gold on other occasions. It’s like creating an entry point,” Hedge said.

To accelerate the adoption, Paytm is now servicing 16,000 pin-codes, making the product available pan India. The Paytm Gold feature has found maximum takers in Kanchipuram, Bangalore, Hyderabad, Thane, and Ahmadabad.

“We observed that many of our customers are shopping and converting their cashback into pure gold. The cahsback feature is a reaction to that. Whether you are shopping online, paying utility bills or buying movie/travel tickets, you can earn pure gold kept for free in MMTC-PAMP’s secured lockers. This will transform the way the Indian consumer saves,” Hegde said.

Paytm, which started as a payment solution provider, is now promoting itself as a payments bank, after announcing its licence approval in May.

Paytm launched its Digital Gold product in October 2016 as a pilot project. In line with compliance rules, Paytm mandates users to furnish necessary know-your-customer documents for transactions Rs 20,000.

There is no cap on the maximum quantity of gold purchased through Paytm.