Zomato launches payments Subsidiary, Zomato Payments to operate Payments Integrations

Zomato food delivery

Zomato has launched a wholly-owned division company Zomato Payments Private Limited, the company announced in a regulatory filing on Thursday. According to Zomato, the goal of registering the subsidiary is to operate the business of delivering payment integrator and payment gateway services in compliance with the Reserve Bank of India’s standards.

The formation of a new subsidiary would also provide services such as prepaid and postpaid payment instruments payment systems, including closed or semi-closed systems payment instruments, and mobile device direct debit. Zomato Payments was developed with an initial subscription of 10,000 equity shares for INR 10, totalling INR 1 lakh. Zomato’s entry into payment services comes nearly a year after its rival Swiggy launched its own digital wallet, Swiggy Money, in collaboration with ICICI Bank.

With this move, Zomato will be competing directly with Indian fintech titans such as Google Pay, PhonePe, and the IPO-bound Mobikwik and Paytm. Since the pandemic, the industry has flourished as users have moved to electronic transfers in order to avoid exposure and make payments remotely. According to an ACI global survey, India continues to lead the world in digital transactions with 25.5 billion real-time payments transactions, followed by China. In July, UPI established a new record with 3.24 billion transactions, a 15.7 per cent increase over June, and a payment volume of INR 6.06 lakh crore.

Zomato Payments aims to own the payment experience for the company’s main meal ordering business as well as related services such as groceries and fitness. With intentions to re-enter the grocery delivery market, the firm had previously acquired a 9.3 per cent stake in Grofers. Additionally, its restaurant supply arm HyperPure, as well as Fitso, which focuses on on-demand sports and fitness products, enhances Zomato’s in-house payment system.

On a corporate level, Zomato’s addition of a payment layer appears to be a significant move, and it will be fascinating to watch how the sector plays out for the food-tech firm’s success.

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