From Business Insider,
Nov. 21, 2017, 9:55 AM
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UK-based fintech, Glint, has launched its debit card and accompanying account, which will allow users to purchase gold and use it as a payment option.
The company was founded in 2015 and has since then secured funding worth $6.1 million in two separate rounds earlier this year, although until now its product had remained under wraps.
Users can load fiat currencies onto their Glint account to buy portions of gold bars, which are located in a vault in Switzerland. When making a payment with the debit card a user can then choose whether to pay in particular fiat currency, or with gold. If the latter, Glint claims it can sell the amount of gold that equates to the price of the purchase instantly. As of now the app is available in the UK and Europe, with only Sterling and gold being supported, but with further roll out in Asia and the US in the next year more fiat currencies will be added.
Gold is seen by many as more stable than fiat currencies, which could boost Glint's appeal. The value of fiat currencies is highly susceptible to change based on political events. For example, the pound has fallen to an almost 80-year low since the Brexit announcements in 2016, while the value of the dollar has also fluctuated heavily on the back of President Trump's decisions.
This is a major driver for people turning to alternative assets — such as Bitcoin — recently to ensure their money does not lose value as political uncertainty continues. Glint argues that gold "cannot be devalued" by political events, and is therefore in a similar category. The reason its popularity has not soared in the same way as Bitcoin's among retail investors is due to how inaccessible the asset has been historically. Glint aims to solve that by enabling people to buy and sell part bars quickly and easily, and hence likely hopes to capitalize on this demand for alternatives to fiat.
However, the ease of using gold for everyday purchases remains questionable. Switching between a fiat currency and gold for small payments is a process that will introduce extra steps into the payment journey, meaning people are unlikely to do it on a daily basis and for small amounts.
That could hinder Glint's ability to acquire customers in the short term. In order to overcome this obstacle, it would be wise of Glint to roll out other products that enable users to benefit from holding gold, for example a savings account. That would enable them to hold gold more like an asset, turning to it as and when they need it, and would also help overcome any potential liquidity issues that might arise from people trying to sell small amounts of gold, frequently.