Bordeaux, 9 October 2019
We had not planned to issue a communication about the proceedings under way for one of our British competitors, Glint Pay, as well as a German competitor, PIM Gold, but we are now breaking our silence to reassure those few customers who have expressed their concerns to us.
The British company Glint Pay, which offers a gold-backed payment card similar to the VeraCash card, is now in administration. The United Kingdom’s FCA (Financial Conduct Authority) launched the proceedings after a loan went unpaid.
We decline to comment on our competitor’s situation, let alone rejoice in it. Competition presents many advantages from a consumer perspective and, as a business, it forces us to systematically re-examine ourselves so that we can tirelessly offer better products and services to our members.
VeraCash and Glint Pay, similar concepts, and yet…
Although, on the face of it, the Glint Pay concept resembles that of VeraCash, the business models are completely different. Glint Pay issues e-money, which is not the case with VeraCash. This major point of divergence between the two business models makes all the difference: being an issuer of e-money entails great responsibilities, both structural (with many legal constraints like direct inspections by the FCA and minimum capital requirements) and financial, responsibilities which a “simple gold merchant” would struggle to fulfil without taking on substantial debt – which undoubtedly explains the extensive financing campaigns run by the British firm.
An e-money issuer’s primary commitment is to segregate all its customers’ funds in a provable way. This is all the more true, given that Glint offers a multi-currency service, so each euro or pound purchased must appear in the relevant account. This is meant to ensure the company’s solidity in the event of massive cash withdrawals, a requirement from which banks are exempt.
As a result, the FCA’s investigation pertains to those funds, not to their equivalent weight in gold owned by the customers. In fact, the FCA mentioned this fact in an official statement: “This activity is not regulated by the FCA, and holdings in gold are not subject to safeguarding requirements”.
The situation is completely different for VeraCash: first, because we do not issue e-money, and second, because we do not offer either suspense accounts or multi-currency accounts – although we are not necessarily opposed to the idea of incorporating this type of services, we have decided to specialize in precious metals (GoldSpot, GoldPremium and silver) in particular. Consequently, the funds we receive are immediately converted into precious metals. Our annual audit reports can even be reviewed to verify the weight of the gold, silver and diamond counterparts of VeraCash accounts.
To provide a brief history, our then partner payment institution Aqoba went bankrupt in 2014. However, because our members’ accounts were not – and are not – cash accounts, none of them were negatively affected by that unfortunate news (no loss of euros, with their gold being continuously stored at the Free Ports of Geneva). We were then able to transparently identify a new partner to issue new VeraCash cards and continue our business unimpeded. And this would still be the case if our current partner were to encounter any difficulties, in turn!
Our core business is to store gold on behalf of third parties and, after 10 years of experience, we can affirm that our business model yields growth which may be slower but which is above all long-lasting. We chose it with pride, and it is thanks to that very model that we are now able to offer a service like VeraCash, that is both safe and innovative!
VeraCash safeguards our customers’ assets
VeraCash does not operate from a perspective of “cash burn”. We did not raise millions of euros just to spend them on marketing and mass customer acquisitions, as British and American companies tend to do.
Our philosophy hinges more on controlled growth, meaning slower growth, and on maintaining our financial equilibrium in the interest of our company’s long-term survival. This also explains why we sometimes need to adjust our business model (commissions, for example) in order to maintain that financial balance.
In addition, VeraCash benefits from the AuCOFFRE.com Group’s 10 years of experience managing physical precious metals stored in its vaults at the Free Ports and Warehouses of Geneva. All our procedures have been approved by our different supervisory authorities: the ACPR in France and French and Swiss customs. For more information about the probity of our approach, please do not hesitate to contact AMUAC, the AuCOFFRE.com and VeraCash User Members’ Association. That association is unique in its kind, participating in audit operations and verifying the probity of the procedures.
We would like to reassure all our current and future members that VeraCash created the market for gold-backed cards in 2012, a business which is now tried and tested, and are working to become a key actor in the decades to come!