Zomato Payments Private Limited (ZPPL), a subsidiary of Zomato Limited was incorporated in the company to start a new journey by becoming a payment aggregator.
Reserve Bank of India (RBI) granted a certificate of authorization to operate as “Online Payment aggregator” on January 24, 2024.
The journey of Zomato to bring up their own payment aggregator began on August 4, 2021. This will allow Zomato customers to pay for food deliveries and restaurant dining seamlessly within the Zomato app. It will give Zomato control over the payment experience and economics and will not have to rely on third party payments apps like PhonePe, Paytm, Google Pay, etc. and save on merchant charges.
The guidelines released by RBI, 2020, required the payment aggregators to get a licence and Zomato applied and became one of the first food tech companies. In January 2023, RBI updated Zomato on their list of Online payment aggregators. After final authorization, Zomato can now act as an intermediary between customers and restaurants, facilitating the payment process.
Features
Some of the key features of the new addition to the Zomato app will help the customers to provide digital payment services, including wallets and payment gateway services.
With its own payment gateway, Zomato gains more ownership over customer payments data and analytics – an advantage over third party services. This can feed into more personalized promotions.
As a licensed provider, Zomato can potentially integrate and offer a wider range of payment methods like various credit cards, Buy Now Pay Later schemes, EMIs etc. beyond UPI.
Being accountable directly to RBI regulations could see Zomato employ latest payment protections around encryption, fraud detection, data security etc. – which boosts customer trust.
Impacts on Indian Fintech Landscape
Expanding competition: Zomato’s arrival might alter the dynamics of the food service sector since it adds another major contender to the already jam-packed OPA field. There may be greater competition for established providers like Razorpay, Paytm, and PhonePe, which could result in more affordable prices and cutting-edge features.
Support for food tech integration: Zomato’s success as an OPA may provide an impetus for other food tech platforms, such as Swiggy, to follow suit and further mask the difference between financial services and food delivery. In the end, this might provide customers with better integrated and smooth experiences.
Pay attention to data security and compliance: Zomato’s entry into the payments space illustrates the importance it is becoming to maintain data security and comply with standards in the Indian fintech industry. In order to keep up with the changing regulatory environment, other firms may find themselves investing in more reliable infrastructure and procedures.
