Digital gold accounts cross 80 million, more than twice demat accounts

April 9, 2019

London (April 9)  Digital gold accounts in the country have risen significantly, taking the customer base past the 80 million mark by March end. This is more than twice the total number of demat accounts in the country.

The two national depositories had 35 million demat accounts between them at the end of 2018 and are estimated to have 40 million by end of 2019. Demat of shares was first launched in 1997. While first digital gold account was launched some fifteen years later in 2012-13.

 Digital gold or gold purchased online on various platforms, including PayTm or Google Pay, and stored in online accounts, has seen a surge the past one year. In the past two years PayTm, a wallet and SafeGold, (a brand with Digital Gold, a Joint Venture between the Private Equity firm Invent Capital and the World Gold Council} are offering the precious metal in digital form. Augmont, an integrated entity engaged in everything -- from refining of gold ore to retailing of pure gold -- started offering digital gold or Digi Gold in 2012.

Other companies offering digital gold account services include Motilal Oswal, PhonePe and Google Pay. Google Pay’s entry, in fact, is seen as a big boost to this segment, given its wide reach, says one industry official.

Industry estimates 8-9 tonnes of gold is sold a year on these platforms and some tonnes are delivered.

Online sale of gold jewellery and coins is catching up faster and increase in customer base of digital gold has only added to the worries of physical jewellers, especially mom-and-pop stores. Online players are offering physical delivery at the doorstep and free storage and are also allowing account holders to convert gold held digitally into jewellery.

Augmont has its own gold refinery which supplies gold for delivery. Paytm, Phonepe and Google pay buy and store gold sold on their platforms with MMTC-PAMPS.

Safe gold and Augmont have tie-ups with IDBI Trusteeship company and with Brink for vault and logistic support.

“We are offering an option to convert gold in digital account to buy jewellery from Caratlane or Candere, the online subsidiary of Kalyan Jewellers,” said Gaurav Mathur, MD, Digital Gold India, which has floated Safe Gold. He said that they were expanding network of jewellers to give wider choice to account holders.

MMTC-Pamps delivers and keeps aside gold sold by wallets like PayTm, Google Pay and PhonePe. Its official, who didn't wish to be named, said, “We expect sharper growth in digital accounts opened as now Google Pay has also started offering them.”

Says Sachin Kothari, Director of Augmontm, which delivers gold coins: “We plan to add a few thousand jewellers to our network with whom our customers will be able to exchange Augmont Gold for jewellery. We are also tying up with india’s leading e-commerce and wallet platforms from where customers can buy Augmont gold.”

Augmont has introduced new-age products like gold on EMI with leading assisted e-commerce players. It delivers gold coins of denomination as low as 100 milligram or 0.1 gram. Augmont EMI products are available in 500,000 assisted e-commerce centres including Vakrangee, Weizmann, Ebix Cash, Quicksun Tech, among others, where villagers and daily income earners can visit and buy gold, silver coins or jewellery up to 10 grams on EMIs.


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