Vending machines usually conjure thoughts of food and drinks, but one firm is tapping consumers' love for something much more expensive: gold.
Two Smart Gold ATMs - vending machines that dispense a range of 24 karat gold items - were launched in Singapore this week at the Marina Bay Sands Hotel and Resorts World Sentosa, luxury venues that attract wealthy Singaporeans and a plethora of tourists.
"We chose Singapore because it's the center of Asia, which is the center of world gold consumption," said Kong Kok Chee, director of Asia Gold ATM, the company behind the launch, referring to Singapore's popularity as a finance and business trading hub for the region.
"Asia accounted for more than 63 percent of total world gold consumption of gold jewelry, bars, collectibles, coins and souvenirs last year," he said.
The Southeast Asian island nation ramped up its bid to become a trading center for gold over the past few years. In June, the Singapore Exchange announced plans to launch a physically deliverable gold contract to meet rapidly growing Asian demand. The launch was scheduled for September but has been delayed to October.
The Smart Gold ATMs dispense items ranging from one to ten gram gold bars, silver ingots and customized gold coins. Customers make purchased using a touch screen that allows them to choose from seven designs including the Singapore Merlion and various Chinese zodiac symbols.
Asia Gold ATM said it's scouting out other locations in Singapore and plans to launch two or three new machines in the near future.
"We are hoping to launch more in the Asian region, such as Hong Kong, Macau and Malaysia," added Kong.
Not the first
Gold ATMs are not a new concept, however. Germany's Ex Oriente Lux launched a 'Gold to Go' machine in Dubai in 2012. The company has also opened ATMs in the U.S., and various locations in Europe. Gold to Go offers 24 karat gold in 320 different forms from gold bars and coins to jewelry. The machine is programmed to refigure prices every 10 minutes to reflect latest market values.
Meanwhile, there has also been similar products launched in Asia. German firm TG Gold Super Market opened two gold ATMs in Beijing in 2011, while Indian diamond manufacturer Gitanjali Group installed a gold and diamond ATM in Mumbai in the same year.
The gold available through Asia Gold ATMs will be priced once or twice daily based on benchmark gold prices. When the ATM was launched on Wednesday, a one gram pendant was priced at around 100 Singapore dollars ($80) and a ten gram pendant cost 660 Singapore dollars. Customers can pay using cash or credit cards.
Thus far, interest has mainly been from Singaporeans and Malaysian tourists, an Asia Gold ATM employee that has been attending the machine at Marina Bay Sands told CNBC. Some Western tourists showed interest too, they said.
61-year old Singaporean Mr. Tan purchased a 5 gram gold bar on Friday morning.
"I do buy gold but never from a machine, and since I was here, I decided to come buy and take a look. This machine is great and easy to use... Very smart," he said.
"We don't see such machines around in Germany - at least I haven't. It's very interesting," a 52-year old German woman who preferred to remain anonymous told CNBC. "I'm thinking of buying two for my children back home, but I would like something heavier," she added. At the time the ATM was sold out of any items weighing above 5 grams.
Asia Gold ATM's Kong told CNBC sales had been encouraging in the first few days of launch but was unable to disclose specific figures.
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