PhonePe becomes largest platform for buying digital gold with 35% mkt share

With over 35%market share, the Walmart-owned firm which competes with Google Pay, Amazon Pay and Paytm has seen a more than 6X jump in the volume of Gold sold in the festival season

Walmart-owned digital payments firm PhonePe said that it has emerged as the largest platform for buying 'digital gold' with over 35 per cent market share. The company, which competes with Google Pay, Amazon Pay and Alibaba-backed Paytm, also said that it has seen a more than  6X jump in the volume of gold sold in the festival season this year (21 days starting from Dussehra till Diwali).

‘’PhonePe saw record sales for Gold this month on the back of the festive season,” said Terence Lucien, head, Mutual Funds and Gold, PhonePe.

He said customers are increasingly opting for digital purchases due to the ease of access,  affordability and safety accentuated by the rising trust in payment platforms like PhonePe. 

“PhonePe has one of the best-designed platforms to buy gold and we are constantly innovating and adding new features,” said Lucien.

PhonePe recently introduced a reminder feature to help customers build the habit of purchasing gold every month. It also added a milestone feature to help motivate customers to achieve their saving goals by investing regularly.

PhonePe had launched the gold category in December 2017. Over the last three years, it has partnered with gold and silver products providers SafeGold and MMTC-PAMP to get users across the country to buy gold online. The company said the gold bought on PhonePe is 24K real gold that can be bought anytime, according to the customer’s budget, starting as low as Re 1. Customers can also opt for the physical delivery of gold and get doorstep delivery in the form of coins or bars, starting as low as half a gram. Customers from over 18,500 pin codes across India have so far bought gold on PhonePe with over 60 per cent of customers from small towns and cities.

PhonePe’s rival Paytm recently said it has recorded 2x growth in the digital gold transactions during the last six months. Since the beginning of this financial year, new users have increased by 50 per cent and the average order value is up by 60 per cent. With this, the total transaction volume on the platform has crossed the milestone of 5,000 kg. The company has now extended the Paytm Gold services to Paytm Money platform, enabling users to buy and sell digital gold on any of the two platforms. 

The company has also announced the launch of its high-value transaction product feature. Here users would be able to buy Paytm Gold worth up to Rs 1 crore in one go on its app. Previously, it was possible for users to buy gold only up to Rs 2 lakh in a single transaction. 

Paytm has registered a steady rise in the number of customers in this space. Over 73 million people have bought Paytm Gold on the platform till now. Almost 40 per cent of these buyers are from smaller cities and towns, which reflects that now people across the country are considering digital gold as a serious investment option. This is further confirmed by the fact that this year’s Akshay Tritiya embarked 2.5x sales compared to last year.

"As the Coronavirus (Covid-19) pandemic continues, Paytm's digital gold has generated massive interest from Indians,” Varun Sridhar, chief executive of Paytm Money, had said. “They  want to continue buying gold for the purpose of investment, personal use and gifting during these uncertain times, but have been restricted from going out to buy gold or meet friends and family.”