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Amazon India brings virtual gold on its payment platform

PhonePe and Paytm already allow buying and selling of gold on their platforms.

Photo by Tom Quandt on Unsplash

Continuing its momentum of launching new services this year, e-commerce major Amazon India has made purchase of gold available on its platform for its users to trade virtual gold.

Users can buy and sell virtual gold from Amazon’s digital payment arm, Amazon Pay. Amazon India has partnered with Mumbai-based company Safegold that allows its customers to transact based on the current market price of gold in India.

Currently, Amazon Pay allows its users to buy gold at as low as INR 5 (USD 0.067). For every online purchase, Safegold keeps an equivalent weight of physical gold in a secure vault in the buyer’s name.

Safegold is backed by investors such as Invent Capital, Beenext Ventures, and Pravega Ventures. The World Gold Council also owns a small, minority stake in the company.

In addition to adding virtual gold, Amazon launched two new services this year. Last week it said it has started selling medicines and healthcare products on its platform. In May, it also entered into food delivery, an already crowded sector with two leading players Zomato and Swiggy.

The launch of virtual gold comes at a time when the festive period in India is about to start, beginning in September. E-commerce companies in the country have started their preparation to offer more relevant services and offerings to get more users. During one of the festivals in October, Indians traditionally buy precious metal including gold and silver. Indian Bullion and Jewellers Association, said 30 tons of gold was sold last year across the country.

To be sure, Amazon is a late entrant in this segment, as Paytm and Flipkart-owned digital payment app PhonePe already have this feature on their platforms. In 2017, both the companies started offering their customers an option to buy and sell gold virtually. While Paytm partnered with MMTC-PAMP, PhonePe facilitates this service through Safegold.

With lockdown in several cities such as Bihar and Chennai, still in place and the importance and sentiments of buying gold during the festival, online companies are hoping digital purchase of gold is going to see an uptick this year. According to the World Gold Council, trading volumes of digital gold in India totaled four to five tons last year, which is just three percent of annual gold retail investment in the country.