Digital payments major Paytm is set to resume physical gold deliveries for its digital gold investors starting mid-April, just ahead of Akshaya Tritiya—one of the most popular occasions in India for purchasing gold.
The move comes after the company temporarily paused physical gold redemption in August last year while it upgraded its infrastructure and logistics network. With the revamp nearly complete, Paytm plans to roll out physical redemption across more than 12,000 PIN codes in India.
The timing is strategic, as gold purchases typically surge during Akshaya Tritiya due to its cultural significance and the belief that buying gold on this day brings prosperity.
Credits: Paytm
Why Paytm Paused Physical Redemption
According to the company, the pause was part of a major overhaul of the digital gold experience on its platform.
Paytm said it used the period to improve backend systems, technology infrastructure, and logistics to ensure a more seamless and unified delivery experience nationwide.
While the option to convert digital gold into physical coins or bars was unavailable during this phase, customers could still sell their digital gold holdings for cash at prevailing market prices.
Several users had noticed the pause earlier, as the Paytm app displayed the physical redemption feature as “coming soon.”
Digital Gold Investments Are Surging
Interest in digital gold has grown significantly in India, driven by the convenience of investing small amounts and the ease of buying through mobile apps.
According to industry data:
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Digital gold purchases via UPI hit a record ₹3,926 crore in January 2026
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Transactions touched 219 million
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This represents four-times growth compared to January 2025
Over 90% of digital gold purchases were made using National Payments Corporation of India’s Unified Payments Interface.
Several factors have contributed to the rise:
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Rising gold prices, making it a safe-haven asset
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Ease of purchasing through apps
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Fractional ownership, allowing investments starting from ₹1
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Accessibility without visiting jewellery stores
Users can typically buy digital gold worth up to ₹2 lakh per day on such platforms.
How Digital Gold Works on Paytm
Paytm offers digital gold through its partnership with MMTC-PAMP, a government-backed precious metals refiner.
The model works in the following way:
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When a customer buys digital gold, the platform purchases an equivalent quantity of physical gold.
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The gold is stored securely in professional vaults maintained by the partner refinery.
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Independent auditors verify that the physical gold holdings match the digital balances held by users.
This system is designed to ensure transparency and trust, particularly for investors who plan to convert their holdings into physical coins or bars later.
Competition in the Digital Gold Market
Paytm is not alone in offering digital gold investments. Several major apps in India provide similar services, including:
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PhonePe
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Google Pay
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Amazon Pay
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Tanishq
Many of these platforms highlight the option to redeem digital gold as physical gold because it increases credibility and trust among investors.
For example, PhonePe has partnered with CaratLane, allowing users to redeem digital gold either online or through retail outlets.
Costs and Charges Investors Should Know
Although digital gold is convenient, investors should be aware of certain costs:
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3% GST on purchases
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Vault storage costs borne by providers such as MMTC-PAMP
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Platform fees charged by the app
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Making charges if converting into physical coins or bars (typically 3–6%)
These costs create a spread between the buying and selling price, meaning investors could incur losses if they sell during volatile market conditions.
Digital Gold vs Gold ETFs
Another way to invest in gold digitally is through Gold Exchange Traded Funds (ETFs).
Gold ETFs are regulated by Securities and Exchange Board of India and usually have lower costs compared to digital gold.
However, there are key differences:
| Feature | Digital Gold | Gold ETF |
|---|---|---|
| Minimum investment | As low as ₹1 | Depends on ETF price |
| Regulation | Not directly regulated by SEBI | SEBI regulated |
| Demat account required | No | Yes |
| Physical gold redemption | Yes | No |
Because Gold ETFs require demat and brokerage accounts, many retail investors prefer the simplicity of buying digital gold through payment apps.
Credits: Mint
Bottom line:
Paytm’s decision to resume physical gold deliveries could strengthen user trust and boost demand on its platform, especially with Akshaya Tritiya approaching—a period when millions of Indians traditionally invest in gold.
