The Gold-as-a-Service App

Fintechs often help their users transfer electronic currency. Minted, a Gold-as-a-Service app, helps its customers trade physical assets like gold coins and bars. Other fintech startups have platforms that let you buy stock in gold mining companies and financial securities linked to gold prices. Minted users can buy physical gold coins and bars directly through the app. I wanted to know more about how this worked so I talked to Shahid Munir, the founder of the startup, on LinkedIn.

Like other fintech apps, Minted solves a problem for younger users who want to start saving early. Individual stocks are often expensive, especially blue-chip stocks. These stocks of reputable companies may cost several hundred dollars, or even thousands of dollars, per share. Fintech startups, such as robo-advisors, introduced partial share purchases to make these shares more affordable. With this setup, a young investor can invest $50 into a stock that trades for $500. And with partial share purchases, that investor could also invest $50 per month in the stock market. A robo-advisor can automatically invest this money in a balanced portfolio by buying partial shares of many stocks, avoiding fund management fees. Even low-cost index funds often charge management fees.

Minted makes these investment methods available for physical gold. Many investors argue that a balanced portfolio should include gold along with stocks, bonds, and other financial securities. And some investors argue that a portfolio should include physical gold, not just securities that are linked to the price of gold. Gold coins and bars often trade at a premium over the market price of gold on commodities exchanges, and sometimes the premium can be 30 percent or more. Premiums are often much higher if you’re buying a small amount of physical gold.

Gold coins and bars cost a lot. Gold currently trades for $1939 per ounce, so a one-ounce coin may be too costly for a young investor. Additionally, that investor might want a safe place to store that gold. A bank vault probably has better security than your house does. Minted can solve both problems. Investors can buy small amounts of gold by making partial purchases. The fintech startup can store that gold in a London vault if the buyer prefers that, or it can also be shipped directly to the buyer. Shahid has a deal with Loomis to store the gold for his customers.

When I talked to Shahid, I asked him whether he planned to link his gold buying app to other brokerages. Fintech startups often allow users to purchase a wide variety of assets, including cryptocurrencies, in addition to stocks, options, and bonds. But I haven’t seen many investment apps that allow physical gold purchases. It turns out that a solution is on the way from Minted. Shahid is planning to create an API that will allow other fintechs’ users to purchase gold in partnership with other brokerages, using a business-to-business-to-customer (B2B2C) model.

I also asked Shahid about making purchases directly with gold. If Minted can provide this service, its users could use gold coins as a currency without converting their holdings into fiat at any point. And he’s working on it. Loomis is a Swedish company that operates in several Western European countries, as well as the United States, so it has secure storage facilities in multiple nations. For customers in these regions, gold ownership rights could be transferred directly.

Another Minted feature reminded me of the early days of PayPal. One way that PayPal gained traction in the 2000s was by appearing as a payment option on eBay. If a customer made a purchase on eBay with a PayPal account, the merchant had to sign up for PayPal to access the money and complete the sale. The Minted app could make gold available as a payment option on third-party marketplace websites. If the buyer offers to use gold coins to make the payment, Minted could automatically set up an account for the merchant.

And last but not least, Minted also offers an affiliate program and I just signed up for it. And I may sign up for other affiliate programs from fintechs as well. Right now, the affiliate program appears to be designed for users in the United Kingdom and I don’t have a bank account there. But marketers might want to watch Minted to see if the affiliate program gets extended to the US. That link currently goes to Minted’s website directly, but I may replace it with an actual affiliate link later.

Either way, Minted fills a need in the market. Many investors argue that a balanced portfolio should include physical gold along with other financial assets. Securities linked to the market price of gold, or gold mining company stocks, are not the same as gold coins and bars. Minted’s Gold-as-a-Service app makes precious metals investing much more accessible for younger savers and investors. And it also makes an asset that was only available to the wealthy in the past more accessible to the general public.

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