For most Indians, gold remains one of the most prized possessions and it seems the reason to own it is not fading anytime soon. The annual gold demand in the form of jewellery itself is nearly 600 tonnes in the country. With rising demand, comes new channel of distribution and PhonePe is one of such e-wallets that provides an online platform to own gold in virtually one rupee.
Here is an email interview with Priya Narasimhan, Director, and Head – Bill Pay, Recharge, Gold and Revenue categories, PhonePe, who tells us the various aspects of buying, storing, securing and sharing other vital information for someone looking to buy digital gold.
What are the various charges in buying gold on PhonePe app for both digital and physical purchase? What is the amount of GST applicable?
Gold Rates can be tracked live on the PhonePe App. They are linked to live rates in the commercial bullion market that are maintained real time and updated every 5 minutes by SafeGold & MMTC-PAMP. The price displayed on the PhonePe app by the respective provider is inclusive of the 3 per cent GST charge and customers are not required to pay any other additional cost.
How is the buy and sell price determined? How close is it to the actual real-time price?
The price of Gold (both sale and purchase) displayed on the PhonePe app is set by MMTC-PAMP and SafeGold respectively. PhonePe plays no role in this.
What is the difference between buy/sell price and why should there be a difference? Does the difference change over time?
Usually, the difference in the price of Gold between buying and selling is because of 3 factors – the fluctuations in price that Gold sees over time along with GST and purchasing charges.
Of what purity is the gold available on PhonePe app?
PhonePe created India s first online marketplace for Gold Savings by collaborating with two prominent players in the space – Safe Gold and MMTC-PAMP. Customers have the option of purchasing Gold of 99.50% purity with SafeGold and 99.99% purity with MMTC-PAMP. Both SafeGold & MMTC-PAMP products (gold coins/bars) are certified for purity by government-appointed assay certifying agencies.
Has it to be stored as digital gold or will there be physical delivery of the gold?
The Gold bought on PhonePe is stored in a bank-grade insured locker facility that is maintained by both the providers, SafeGold and MMTC-PAMP. Additionally, IDBI Trusteeship protects the customer s interests so that no Gold can leave the locker facility without a proper audit. Additionally, customers can also get Gold coins delivered to their doorstep for as low as 0.5 gm and as high as 20 gm. Coins of the following grammage can also be delivered – 0.5g, 1g, 2g, 5g, 10g, and 20 g.
How will you explain the importance of MMTC-PAMP to a layman investor/buyer?
MMTC-PAMP is an internationally recognized gold and silver refining and minting facility. The company is set up as a joint venture between India’s MMTC (a Government of India Undertaking) and Switzerland’s PAMP SA (the world’s leading bullion brand), part of the MKS PAMP GROUP. MMTC PAMP is India’s first and only London Bullion Market Association (LBMA) accredited gold and silver refinery.
What if one wants to sell the digital gold stored in PhonePe app or if received as physical gold?
Customers can choose to buy, sell or request delivery from SafeGold or MMTC-PAMP, both. Each locker is separate from the other. If a customer has balance in both accounts, he or she needs to separately sell Gold from both the accounts. A customer can sell Gold worth Rs. 5 or more.
There are many apps and online websites where one can buy digital/ physical gold. What are the important watch outs for the buyer?
The most important things to consider when buying Gold online is to ensure the platform is secure, they offer fair pricing and the Gold sold is of necessary purity and standard. At PhonePe we have ensured we provide our customers with the best possible experience across all these parameters.
What is the utility/usage of 18 karat, 22 karat and 24 karat gold?
Pure gold is known as 24 karat gold. Since it is soft and pliable, it not used in making jewellery. Instead, it is mostly used to make coins, bars and is also used in electronics and medical device. The 18 karat version contains 75 per cent gold by weight and is generally used for studded and other diamond jewellery. In 22 karat gold, 22 parts of the metal are gold and the rest is other metals and alloys. It is also known as 91.67 per cent pure gold and is used for making jewellery.
Can you briefly describe the process to buy gold on PhonePe app?
Buying gold on the PhonePe platform is fairly simple. Customers can log onto the app and select the Gold option in the My Money section. They will then get the option to choose between two providers – SafeGold (99.5% purity) or MMTC-PAMP (99.9% purity). Once the customer decides the provider, they are presented with the price per gram. Customers can buy gold both as per the grams of gold they require or as per the money they have at their disposal.
After they have finalized the gold they want to buy, they can complete the payment securely on the PhonePe app using their preferred mode of payment – UPI, Debit card or Credit card. Once the payment is completed, the gold purchased starts reflecting in the customer s Digital Locker and the physical gold is stored in a bank-grade insured locker facility run by their chosen provider SafeGold or MMTC PAMP.
A users gold account on the PhonePe app remains active for 7 years from the date of last purchase. The customers are encouraged to either sell back or take delivery of the Gold after the stipulated period ends.