Payments companies witness a gold rush during festival season

BENGALURU: After the big boost during Navratri week, digital payments companies have recorded bumper transactions during Dhanteras and the pre-Diwali shopping festival. Driven by consumer demand for gold during this time, payments companies have recorded a strong show in transactions and, at the same time, seen a wide adoption of digital gold.

The largest payments company, Paytm, said that since its launch, the company has sold more than 2 tonnes of gold through its application and around 10 million people have bought the metal through the app.

In a note shared with ET, the company said Paytm Gold has witnessed widespread adoption across Delhi, Haryana, Uttar Pradesh, Maharashtra, West Bengal and Karnataka with two-thirds of the overall adoption coming from tier-II and tier-III cities.

“Our gold gifting service has proved to be a great hit, registering a 10-times jump in orders. This further reaffirms our belief that Paytm Gold is an attractive gold buying and gifting method. We expect the festive gold shopping fervour to continue weeks after Diwali,” said Nitin Misra, senior vice-president, Paytm.

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Even Paytm’s Bengaluru-based competitor PhonePe said it saw a significant jump in sale of digital gold on its platform. The company claimed to have recorded a 200per cent increase in sale of gold during Dhanteras compared to a normal business day. More than 40 per cent of the pincodes in the country saw gold purchase on PhonePe’s application. It also claimed to have recorded a 400 per cent jump in ticket size of gold purchases on its platform.

Customer Intent Trust

“We saw an overwhelming response to gold during Dhanteras with over 3.5 million unique users exploring the category during the event. Gold purchase on PhonePe is fuelled by genuine customer intent and trust as demonstrated by the sizeable number of gold transactions using UPI on our platform. This is in contrast with other platforms, where Goldback/ wallet cashback is leading to an artificial increase in gold transactions,” said Karthik Raghupathy, head of strategy and planning at PhonePe.

Meanwhile, point-of-sales deploying company Worldline said transactions through its platform went up 25per cent compared to last year over the last weekend. While jewellery saw a 52per cent jump, liquor stores saw card transactions going up 73per cent, followed by appliance purchases which went up 48per cent and movie ticketing by 55 per cent. Worldline said RuPay card transactions, as a share of debit card transactions, shot up to 16 per cent against 11per cent last year.

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