The Fintech Effect

Gold becomes shoppers' new digital way to pay after app launch

Key Points
  • Users will own a physical piece of gold that sits in a Swiss vault.
  • The app allows people to use gold as a means of payment.
  • Foreign currencies will soon be added to the app.
Gold joins bitcoin in digital payment space

An electronic payment app that allows people to pay for goods and services in has been launched by fintech firm Glint.

Released Monday, the app — also called Glint — allows users to link a debit card to their phone, which then lets them buy physical gold bullion that is stored in a Swiss vault.

Jason Cozens, the company's chief executive and co-founder, said Monday that central banks' quantitative easing policies and the collapse of some banks have made many people realize that traditional accounts are not a risk-free option.

"Since the financial crisis, people are starting to understand that purchasing power of their money isn't safe," he said.

On its website, Glint says that once either a currency or gold is linked to a Mastercard, customers can buy "anything from a coffee to a car." The company adds that users can also select the precious metal to make peer-to-peer payments.

Cozens valued the gold market at $8 trillion and said people would be surprised by how many people want to hold or spend gold.

He added that the app was originally aimed at wealthy people looking to store their wealth outside of the banking system, but research showed that there was interest across the financial spectrum.

"Look at a student who grew up during the financial crisis. They have a mindset that says they believe in independence about savings," he said.

Cozens said he expected the app to prove particularly popular in India and Germany.

A woman tries a gold earring at a jewellery showroom in Mumbai, India on October 28, 2016.
Danish Siddiqui | Reuters

Over the next few months, Glint will also allow users to hold and spend funds in a variety of currencies, each stored in a U.K. bank.

Users can check exchange rates on their phone before selecting which currency or what amount of gold they will use to make a purchase.

The app was launched in Europe on Monday and will be rolled out in Asia and the U.S. next year. Early investors include a former CEO of the World Gold Council as well as a former chairman of Goldman Sachs in Asia.

The price of gold has risen about 12 percent in value this year and currently sits at just below $1,300 an ounce.