In a significant development, Zomato Payments Private Limited, the subsidiary of popular food delivery platform Zomato, has obtained the much-coveted payment aggregator (PA) license from the Reserve Bank of India (RBI). The approval, dated January 24, 2024, empowers Zomato Payments to facilitate ecommerce transactions through its platform.
Background and Strategic Moves
Following its incorporation on August 4, 2021, Zomato Payments aimed to function as a payment aggregator and issuer of pre-paid instruments. This move aligns with Zomato’s strategy to diversify and reduce reliance on external payment apps. Last year, Zomato collaborated with ICICI Bank to introduce its Unified Payments Interface (UPI) offering, Zomato Pay, with the goal of minimizing dependency on platforms like Google Pay, PhonePe, and Paytm.
Industry Landscape and Competition
With the RBI nod, Zomato joins the league of esteemed players such as Tata Pay, Razorpay, and Cashfree, who have also secured the coveted payments license. Zomato’s approach to providing in-house payment solutions not only enhances user experience but also enables cost savings by circumventing third-party app charges, a strategy mirrored in its collaboration with ICICI Bank.
Diversified Offerings and Past Partnerships
Zomato’s foray into financial services includes not only payment solutions but also collaborations with banks for co-branded credit cards, exemplified by its previous partnership with RBL Bank, albeit terminated in May last year. Beyond food and grocery transactions, Zomato Pay extends to payments at select restaurants, offering users varied payment options like cards, net banking, and UPI.
Important Questions Related to Exams
When was Zomato Payments Private Limited granted the payment aggregator license by the Reserve Bank of India (RBI)?
- What was the strategic move made by Zomato last year to reduce dependency on external payment apps?
- Name three competitors mentioned in the article that have also secured the payments license.
- In May last year, Zomato terminated its co-branded credit card partnership with which bank?
Besides food and grocery transactions, where else does Zomato Pay extend its payment options?
Kindly share your responses in the comment section!!