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Now, PhonePe joins hands with SafeGold for digital gold product

As the battle in the digital payments space heats up, cos are not restricting themselves to cash-back incentives, but are also making other offers like savings product.

, ET Bureau|
Last Updated: Dec 13, 2017, 12.33 AM IST|Original: Dec 13, 2017, 12.33 AM IST
Ecommerce major Flipkart’s digital payments arm, Phone-Pe, has launched a digital gold product in partnership with SafeGold.

Paytm, the country’s largest digital payments company, already offers a similar product.

As the battle in the digital payments space heats up, companies are not restricting themselves to cash-back schemes and incentives, but are also making other attractive offers like this savings product to entice users.

“We are focused on creating multiple use cases for consumers. We did credit card payments on PhonePe app and now digital gold is an addition in that direction,” said Hemant Gala, head of banking relations and strategic partnerships at PhonePe.

PhonePe leverages the Unified Payments Interface for its customers, thereby enabling them to make payments directly from their bank accounts without the need to park money in a wallet.

The company will allow consumers to buy 24-karat gold worth any amount. The price will be linked to that in the bullion market.

IDBI Trusteeship Services will act as the trustee bank, administering the gold holdings of the consumer. Safe-Gold, which offers online buying and selling of the yellow metal, has integrated its platform with PhonePe for carrying out the transactions.

“We are already seeing an average transaction value of Rs 1,500 on our platform which is much higher than standalone wallets,” said Gala, adding: “Hence we hope that with these trusted names consumers will engage more with our platform through the digital gold product.”

The company has tied up with logistics partners to deliver the gold to those who want to hold it physically. Otherwise, it will be stored in the vaults of Brink’s, a global secured storage facility.

Payment companies which operate with wafer-thin margins are creating products like this to mainly increase stickiness of customers and, at least for now, are not looking at these as revenue sources.

“For us it is a customer engagement category. As per industry estimates, around Rs 6,000 crore worth of gold gets bought through the various investment schemes run by offline merchants. We are trying to take it online,” Gala said.

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