Fintech firms capitalise on digital gold rush this festive season

Firms store physical gold in vaults to back up the accumulated gold stored digitally in a user's account

This festival season, a digital gold rush has descended on the financial technology (fintech) sector, with companies rolling out new ways for users to invest in gold through micro-purchases and even systematic investment plans (SIPs) for regular savings.

 

Major fintech platforms — PhonePe, Paytm, Amazon Pay, MobiKwik, BharatPe, and others — are offering special deals to drive interest in digital gold investments during Diwali. Paytm, for instance, allows users to invest in gold digitally with a minimum entry of just Rs 1.

 

Across platforms, users can set up recurring investments via daily or monthly SIP options, making it easy to grow their digital gold holdings over time.

 

The low ticket sizes have enabled firms to strengthen their presence in this space.

 

For example, PhonePe reports that over 12 million users across India have bought “high-purity 24K gold” on its platform, which charges zero making fees. The companies report strong traction in major metro cities for digital gold purchases.

 

“Delhi-National Capital Region, Hyderabad, and Bengaluru are the top three cities for digital gold investments, representing 22 per cent of total activity. Digital gold encourages disciplined saving, letting users start with as little as Rs 10, and promotes consistency over time through SIP options,” said Bipin Preet Singh, co-founder and chief executive officer of MobiKwik.

 

The appeal of digital gold among fintech users is driven by the ability to own fractional amounts of the metal, offering a flexible alternative to physical gold purchases.

 

“We’ve observed a growing preference for digital gold, valued for its flexibility in fractional ownership and assurance of verified 24K gold. This trend is especially popular with young urban professionals looking to diversify their savings,” said Anuradha Aggarwal, director and chief marketing officer, Amazon Pay India.

 

The offerings have led fintech firms to collaborate with established players in digital gold, including MMTC-PAMP India, SafeGold, and CaratLane.

 

To back digital gold holdings, firms store physical gold in vaults, ensuring that users’ digital accounts are matched by real assets.

 

Most fintech platforms also offer instant selling options, allowing users to cash out in Indian rupee or by weight, at current market rates. Some platforms go further, offering to deliver purchased gold in physical form directly to customers.

 

PhonePe is offering up to Rs 2,000 cashback on digital gold purchases of Rs 1,500 or more until November 1.

 

During Dhanteras, MobiKwik offered an additional 10 per cent in free gold for users who invested at least Rs 2,100 and set up a daily SIP.

 

Amazon Pay, meanwhile, provided a 3 per cent cashback reward for Amazon Prime members, while BharatPe’s new Invest BharatPe application offers 1.1 per cent in free gold on purchases of Rs 100 or more during the festival season.   

Golden glow 

Major fintech firms have rolled out offers to attract investments in the digital gold space 

Offers include cashbacks and rewards on every digital gold purchase

Low ticket size option has enabled firms to strengthen their presence in this space