ASIA: Paytm e-wallet enables users to buy and sell gold

Paytm has partnered with MMTC-PAMP India to launch the 'Digital Gold' platform for users to buy and sell gold in digital and physical forms. Paytm is India’s largest mobile payment platform that allows users to make bill payments, recharge mobile, book flights and transfer funds. It has accumulated 200 million registered users. Now, with this platform, users can purchase 9999 gold, the purest form of gold used for trading across the world for as low as Rs 1. Users can also store and sell gold anytime on any day.

Digital Gold’s monthly and daily transaction limits are Rs 20,000 and Rs 5,000 respectively. There is no transaction limit for other payment modes such as internet banking, credit card or debit card. The minimum purchase unit is 0.1 gram and the gold will be stored in vaults maintained by MMTC-PAMP. There will be no charge on buying gold. However, the redemption of gold in digital or physical form will be subject to gold making and delivery charges. The physical gold will be delivered within 14 working days after redemption.

According to RFi Group data in H2 2016, 32% have used Paytm to conduct their day to day banking activities in the last 12 months. We expect to see Paytm usage in the country continue to increase following the move by the Indian government to remove Rs500 and Rs1,000 notes from circulation. In India, the credit card penetration is low and the cheque payment system is not well developed. Hence, we believe this demonetization move would accelerate the need for digital payments in India and provide opportunities for Paytm to expand the user base for day-to-day transactions and investments.

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