Paytm to resume delivery of physical gold next month for its digital gold investors

Paytm to resume physical gold deliveries

• Paytm to resume physical gold delivery for digital gold investors
• Physical gold redemption will cover over 12,000 pin codes
• Digital gold purchases via UPI hit Rs 3,926 crore in Jan 2026

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Mobile payments firm Paytm will resume physical gold deliveries to its digital gold investors from next month, ahead of Akhaya Tritiya, considered an auspicious occasion for buying gold, the company told Moneycontrol.

Most payment and investment apps offer investments in digital gold on their platforms, and the customers can sell their gold whenever they choose. The redemption is often in cash, while a small segment of customers chooses to redeem it in the form of physical gold through coins or gold bars.

“We have been revamping the overall digital gold experience to further enhance redemption options. As part of this upgrade, physical redemption and delivery coverage of digital gold on Paytm will be available across more than 12,000 pin codes, which is a massive exercise. This will be enabled starting mid-April as we complete backend product and technology improvements,” Paytm said in a statement to Moneycontrol.

According to a few Paytm gold investors Moneycontrol spoke with, the fintech firm had temporarily paused redemption of physical gold since last August, without giving a reason. The app shows the redemption of the physical gold option as “coming soon”.

The company said that the temporary pause was to revamp the infrastructure and logistics to deliver a unified experience across the country. The company added that the option of selling gold at prevailing market prices has always been available to customers.

Rising sheen of digital gold

In January 2026, the digital gold purchases through UPI surged to a record high of Rs 3,926 crore and 219 million transactions, a four times growth over January 2025. Over 90 percent of all digital gold was purchased through NPCI-operated UPI, the country's most popular digital payment method.

The rise in gold price and its role as a safe haven, the ease of purchase and accessibility and more importantly, the fractional ownership drove the customers' interest in digital gold. Customers can buy gold from Re 1 to around Rs 2 lakh a day.

The physical gold delivery option

The sale of digital gold through payment apps such as Paytm, PhonePe, Jar, Amazon Pay, Google Pay and Tanishq has been steadily rising over the last year. Interestingly, most platforms promise or advertise the option of redemption of physical gold to enhance trust and credibility among customers.

Most fintech platforms sell digital gold as a savings or investment product. The gold value is tokenised by companies like MMTC-PAMP or SafeGold. Paytm’s partner is MMTC-PAMP, an India government owned company.

Every time a customer buys digital gold, these apps buy an equivalent of physical gold and keep it in the safe vaults of MMTC or SafeGold. The process is also audited by an independent auditor to ensure that these apps purchase the physical gold of the same quantity.

Last month, the premises of Jar were searched by the Deposit Fraud Investigation unit, which falls under Karnataka’s Crime Investigation Department (CID), over potential violations, Moneycontrol reported.

The state's department sought clarity on the company’s gold storage practices, including the custodial arrangements and safeguards in place to protect customer holdings, per sources.

Customer awareness

Investing in digital gold entails 3 percent GST, storage cost for firms like MMTC-PAMP and platform fees charged by these apps, which differ across platforms. And hence the buying price often differs from the selling price at any given point in time.

However, customers buy these as investment products for gold price appreciation. During intense volatility in global commodity prices, customers can lose money if they sell at the wrong time.

Redeeming physical gold

Most platforms have a cap on the minimum volume of gold one can redeem as physical gold, and this varies across platforms. But it is often one gram or higher.

PhonePe has a partnership with Caratlane for redeeming physical gold, whether through the partner’s ecommerce platform or through the retail outlets.

Physical redemption in the form of physical gold could also entail making charges, similar to how it is in jewellery showrooms. While gold ornament making charges could go from 6-8 percent to 18-24 percent depending on the complexity of the work, the making charges for the coins or bars are often between 3-6 percent.

Another digital gold option

Another option to purchase digital gold is through Gold ETFs, which are mutual funds that invest in gold and offer the same fractional ownership with fewer charges, apart from being regulated by SEBI. However, there is no option of redeeming the investment as physical gold coins.

Customers need to open a demat account to invest in Gold ETFs. This is akin to investing in the stock markets, hence a large majority of the users find it convenient to purchase digital gold over ETFs.