Alibaba-backed Paytm has marked its first foray into wealth management in India with a new system to allow users of its digital money wallets to buy and sell gold on their smartphones.

Paytm, which is owned by India’s One97, has been seeking to expand its financial offerings beyond the wallet and payments app that has attracted more than 200m users. It said on Thursday that its new “digital gold” system will target the millions of Indians who historically save their money in bullion.

“We entered the financial services from the payments side,” said founder Vijay Shekhar Sharma, who added that Paytm was “more a financial services startup than a technology startup”.

“Our intention was never to make money from the payments side. We have the intention of making money on [these] value add products,

“People were using the Paytm wallet to pay and sometimes buy – now they can use it to save.”

According to Paytm, users will be able to buy and sell gold for as little as Rs1, after which it will be stored at lockers run by MMTC-PAMP, a joint venture between the Indian government and a Swiss bullion refiner. They can have their purchases delivered for a charge.

India has $900bn of gold kept at home and in bank lockers, according to MMTC-PAMP.

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