Lee Boyce, Consumer Affairs Editor of This is Money, speaks with our co-founders on how Glint is reintroducing gold as money
On a drab Wednesday morning last week, my bacon sandwich and latte from a London café were purchased with gold – 2.992g of gold to be precise, which covered breakfast for the four of us dining.
No, a tiny speck of gold wasn’t given to the waitress, nor had I been thrust into a dystopian future in which the precious metal is the only way to pay – it was done via a debit card.
Glint, a new app, lets you open an account to buy and store gold and dishes out a Mastercard debit card to users who can then spend it like a regular currency.
It says banks, forex companies, gold dealers and money transfer bureaus often hide a mark-up in their exchange rate of between 3% and 8%.
Its co-founders, Jason Cozens and Ben Davies – who have decades of experience in gold – claims that Glint has transparent and fair pricing which uses the ‘real interbank exchange rate’.
The fintech start-up is going back to old times when using gold as a currency was standard, but propelling it into the 21st century with a card and app.
It lets you store your money in gold and convert it back to fiat currency at the point of payment.
It’s an interesting concept, being able to buy physical gold, load it onto a debit card and spend it – and not just for the novelty factor of seeing how much a round of drinks in the pub would be in grams of gold.
Glint, which is available to customers Europe-wide, charges a flat 0.5% fee on all transactions worldwide.
This might not sound particularly great in Britain, but for overseas travel, not bad compared to some fees and poor exchange rates offered by the banks.
The pair also point out that while many think banking is ‘free,’ for many, it is not, with overdraft charges and some accounts costing a monthly fee.
The physical gold is held in a vault in Switzerland. As more customers join Glint, it will purchase the gold and store it. While customers own the gold, they cannot take receipt of it should they wish, they can only buy and sell it using the app.
Jason and Ben believe gold is a truly global currency and that people want a way to be able to spend and own the precious metal easily.
The firm is regulated by the Financial Conduct Authority as an e-money institution and has plans afoot to launch in the US.
Currently, accounts can only be opened on iOS – with an Android version coming before the summer. It has a team of 40 based in Shoreditch.
Ben told This is Money over our gold-bought breakfast: ‘We set-up Glint because almost without exception people around the world recognise that paper (electronic) money which fuels the financial system and economy isn’t healthy.
‘In many cultures, like the UAE and Asia, gold is already recognised as true money with intrinsic value, but until now it’s not been possible to use in the electronic and mobile payment system.
‘Glint has married technology with the oldest form of currency, gold. Users can now spend gold as money anywhere in the world – to buy a coffee or a car with sound money.
‘In any economic climate, gold is both a stabiliser and equaliser of value. That appeals to anyone who is concerned about the erosion of their money.
‘In essence, when people ask for more money what they really want is their money to buy them more.
‘Gold is the purest form of money as it can’t be created out of thin air like paper money, it will buy you more.’
The price of gold is currently around 30% lower at today’s levels than 2011.
It currently sits at £1,330 an ounce having risen around 4% since the start of the year.
Its all-time high was in 2011, when it reached $1,862. It fell as low as $1,068 in 2015.
Glint offers accounts between sterling and gold with more currencies to come. The founders suggested that it may offer silver in the future, but for now, is focusing on gold.
When customers sign up and have gold held in their account, and then pay for something, Glint coverts the cost immediately, effectively selling the required gold to cover the cost.
It says there is no monthly running cost, initial set-up fee or costs to buy the gold other than the 0.5% fee it charges on transactions.
The founders say that unlike cryptocurrencies, gold is far less volatile and a better storage of value.
Gold: The price of the precious metal has risen since the start of the year
Ben and Jason have raised millions from backers for Glint. Ben has nearly 20 years’ experience in international finance and commodity markets, including setting up an investment management company specialising in precious metals.
Jason co-founded Gold Made Simple, which helps clients buy and sell physical gold and have it stored securely or delivered.
They say that gold is ‘independent and incorruptible, its value is recognised everywhere’ and say that using physical gold as money protects people from systemic risk and the erosion of value through inflation.
They add: ‘We’re taking gold out of the vaults and putting it into your hands.’
It says money is safeguarded in segregated client accounts – and it uses Lloyds Bank to do this.
When telling the waitress that the payment for breakfast was being made with gold by Jason as he entered his PIN, she shrugged her shoulders and said ‘money is money’.
I was more impressed – especially when he refreshed the app and it showed the payment straightaway, revealing how much gold had been spent.
As I stepped out into the London gloom, I thought about how gold for thousands of years had been kept in pouches to spend on streets like these – Glint may just start making the precious metal a popular way to spend once more.