Exclusive: ‘A Golden Opportunity’ – Shahid Munir, Minted in “The Fintech Magazine”

Gold buying and trading app Minted was preparing to launch just as the pandemic prompted an investor stampede for bullion. So, it pulled out the stops and within weeks had turned over £500K. For co-founder Shahid Munir, it was the start of a glittering new career.

It was Voltaire who said paper money eventually goes back to its intrinsic value of zero. Time and time again, he’s been proved right. Whether it was the fall of the Roman denarius or the Iranian rial, which now trades at 42,100 for one US dollar, fiat money eventually becomes worthless.

Perhaps that’s why some economies still prefer to trade in gold. It’s glitzy, tangible and holds its value. Recently, we’ve seen a rise in gold bartering in India, where households store an incredible 25,000 tonnes of gold, the highest domestic stash of any nation.

But it’s not just the East that trusts gold more than fiat currencies or volatile investments. Like religion or family, it tends to be what we turn to when all else fails. When markets wobble, investors pile it on like gangsters at a bling convention. We saw it in the aftermath of 2008, when gold demand hit a 28-year high. And we’re seeing it now, in the midst of a pandemic-induced recession.

On August 4, spot gold raced past trading highs of $2,000/oz, only for prices to experience their sharpest fall in seven months and then more than recover within the space of a few hours a week later. Despite the somersaults it’s performed recently, gold is famously dependable. But, on the whole, it’s not the likes of you and me who benefit.

Shahid Munir knows about gold and, with a cohort of entrepreneurs, he’s created a gold-trading app or our time: Minted.

Gold you can hold

There are plenty of mobile trading platforms you can use to get into this market – but what you hold is a piece of paper, an electronically-traded fund for which the underlying asset is bullion. What makes Minted unique is that the investor gets to own the physical gold. You can even get it delivered to your door.

“We deal in physical gold”, explains Munir. “That gold is physically attributed to you. With the other trading apps, you’re subject to manipulations of the gold price itself, and that’s the only thing you’ve really got exposure to – the movement in gold price. Whereas here, you hold gold.”

It’s an interesting proposition, and one which could appeal to risk-adverse investors. One of the special things about gold is that, even though it’s low-risk,
like a bond, it’s protected against inflation, like a share. It’s the best of both worlds.
For Munir, it’s a no-brainer.

“You could buy a car with a kilo of gold back in the 1920s,” he says. “And you can do the same today. It’s almost inflation-proof. Gold has an intrinsic value; it has a certain level of supply, as opposed to a printed currency.”

The ore that’s underrated 

No wonder Munir feels that he’s stumbled on a gold mine.

“Gold has always been neglected as an asset class,” he continues, “even though, if you look at the performance of gold over the past 10 years, it’s outperformed the rest.”

It’s true that retail investors have not been snapping up gold, but central banks can’t get enough of it. In the months before the pandemic gripped the planet, they began raking in record amounts of the stuff. In 2019, they repatriated 650 tonnes of gold back into their vaults, the largest amount recorded in 50 years. According to Adam Glapiński, governor of the National Bank of Poland, gold still ‘symbolises the strength of [a] country’.

So, it’s strange that, for such a valuable asset, the buying and selling of gold does not fall under any regulation, according to Munir.

“Apart from the usual AML (anti-money laundering) and KYC (know your customer) controls that you have to conduct, there’s no formal regulation. It doesn’t even attract VAT, which is another benefit.” Despite this, the team at Minted wanted to get a stamp of legitimacy to reassure customers, so it became regulated as a trader under the UK’s Financial Conduct Authority. “It adds further confidence for the customer,” says Munir.

Making gold accessible

The genesis for Minted was similar to many fintech startups: a frustrating problem. Munir and his co-founders wanted to invest in gold themselves. But purchasing a block was not an option.

“Wherever you go, there’s almost a 30 per cent mark-up on the gold bar,” Munir explains. “If you calculate the rate for gold when you buy a bar, it’s staggeringly high, and we just could not understand why. We all wanted to own the asset, [but] you’ve got to spend north of £250,000 if you want to get a good rate.”

Munir and his gold hunters did not like getting ripped off. Where most people would have given up and gone home, they decided to create their own gold-trading app. As with most things in life, a little charm can go a long way. To get the gold, the team had to forge strong relationships with the right people.

“We made a very good contact with a refinery,” Munir explains. “We sold them our vision and they were like ‘even though you don’t have the volumes there, we’ll let you buy it at close to market rate and see if you can really build this thing up’. It kind of went from there.”

They say luck is the meeting of preparation and opportunity. The team were already well underway when the unpredictable hit the world and demand for gold skyrocketed. Since the start of the year, the price of gold has soared by 34 per cent (as of the first week of August 2020). Ready or not, Minted needed to launch ahead of schedule  to capture the momentum created by the pandemic.

“We were kind of hurried into it,” recalls Munir, “because the pandemic came, the lockdown hit and there was a gold rush. Everybody wanted to buy it.”

The team needed to power ahead and adapt to the surging demand.

“Luckily, we had some reserve stock in place,” says Munir. “So, we thought ‘right, the techies have done a great job on the backend. It doesn’t look wonderful, but it’s functional. Let’s launch’.”

Minted has since turned over more than £500,000 of gold, raised £1.5million from  investors and grown the team to 15 people.

“We wanted to make buying gold simple, secure and affordable,” says Munir. “So, we start our savings plan at £30 a month [but] you’re getting the same rate as someone spending a quarter of a million pounds.”

They found a way for users to seamlessly move gold, too. “Our app has the functionality to transfer gold,” says Munir.  “So, if I wanted to send you a couple of grams, I can do it through my app, and you would receive the grams, even if you’re not a customer.” Not only can Minted members trade and transfer gold, they can earn it as well.

“We’ve combined an element of gamification into the app, so we’ve got this system where you accumulate points that you can redeem for physical gold,”  says Munir.

Anyone on the app can pick up free gold, like Super Mario in the Mushroom Kingdom, and have it delivered minty fresh to their doorstep. But we’ve saved the best till last. Put down your coffee and get ready to catch your jaw. The Minted team is facilitating a way for everyday customers to pay in shops with gold. If they can pull it off, it’s surely one of the biggest comebacks of all time. Here in the UK, we haven’t shopped with gold since the Napoleonic Wars.

Minted is on a gilded mission. With the tap of a phone, it wants to seamlessly make gold the international currency it once was.

“It would be fantastic if, one day, you walked into a shop and there was a sticker saying ‘Minted accepted here’, and you can pay with gold,” says Munir. “It’s something that we’re exploring with jewellers, right now. I see that being in the near future, for sure.”

In the meantime, Minted members should soon have the next best thing: a debit card that converts the gold you own to digital cash for payments. That’ll be one sparkling ewallet!