Internet giant Google is readying a service that will allow Indians to buy gold on its mobile payments app Google Pay. The plan is to launch ‘Gold Account’ — a gold-linked savings scheme — for users to purchase gold at prevailing market prices, maintain gold balance virtually and redeem at a later stage as gold coins or cash.
The move would mark the entry of Google Pay into wealth management services. Launched as Tez in September 2017, and rebranded as Google Pay a year later, the app currently allows peer-to-peer and peer-to-merchant payments.
In September, Google said the payments app had 25 million monthly active users (MAUs) — people who use the app at least once a month — in India.
According to Google Pay’s terms and conditions page, first pointed out by business intelligence platform, Paper.vc, the California-based technology major has tied up with MMTC-PAMP India, a joint venture between state-owned metals trading company MMTC, and Swiss refiner of precious metals PAMP SA, for the gold accounts. Gold bought through Google Pay will be sourced from and maintained in physical form by MMTC-PAMP.
To activate the gold account, users will have to complete the prescribed know-your-customer (KYC) formalities. Once done, they can purchase virtual gold units at the current market price using Google Pay app.
The account balance will reflect the current price of the accumulated gold units, which can be redeemed as physical gold or cash in the account once those are equivalent to the minimum denomination of, say, 1 gram of actual gold.
It is, however, not clear when Google will roll out the service. A Google India spokesperson declined to comment.
In its terms and conditions page, Google stated that MMTC-PAMP will be responsible for “the sale, delivery and repurchase of gold and other related service”, such as the pricing information on Google Pay. All gold transactions will be between MMTC-PAMP and the customers.
With this, Google is following the footsteps of Paytm and PhonePe — both payments apps — that offer gold accounts to their customers. Paytm, the first to roll out gold-linked savings in April 2017, has since diversified into offering an array of wealth management services such as mutual funds through a separate app called Paytm Money.
Wealth management is understood to be the next logical extension to the mobile payments business as it improves user stickiness, cash float and volume of transactions. After Paytm, which saw a huge spurt in volumes after the Indian government’s surprise move in 2016 to demonetise 80 per cent of currency notes, several app services like PhonePe, Google Pay, Amazon Pay have pushed hard to go deeper in the market with varying strategies.
Flipkart-owned PhonePe is implementing a strategy to open up its app for other third-party services. The latest version of its app has inbuilt micro apps to facilitate booking on platforms such as RedBus, IRCTC and OYO among others. Amazon Pay and Paytm have launched discounts on food orders and utility bill payments.