Called Zomato UPI, the offering will allow customers to create new UPI IDs and make payments without leaving the app interface
Ecommerce giant Flipkart is also mulling launching an in-app UPI payments feature ahead of the festive sale season
This comes as NPCI plans to onboard more consumer-facing companies to the UPI network to curb the dominance of PhonePe, Google Pay and Paytm in digital payments space
Continuing its series of experiments, foodtech giant Zomato has rolled out an in-house Unified Payments Interface (UPI) service for peer-to-peer (P2P) and merchant transactions
Called Zomato UPI, the third-party application for UPI has been launched in partnership with ICICI Bank. Through the offering, Zomato customers will be able to sign up for new UPI IDs and make payments without leaving the app interface.
“Zomato has a large set of customers that frequently use UPI to make payments for their food orders. We are providing a facility (as technology partner to ICICI) for customers to create a UPI ID on Zomato app so that they can make payments seamlessly (without the need to switch apps),” a Zomato spokesperson said.
Moneycontrol, citing sources, reported that Zomato UPI is currently a ‘pilot of sorts’ and would eventually be rolled out on a larger scale depending on the adoption rate and customer stickiness. The new initiative has been envisaged to make the entire payment process less-cumbersome and push users to increasingly opt for UPI payments and move away from cash on delivery (COD) orders.
Cash on delivery orders present two major issues for the company – handing physical cash and the risk of customer refusal on order delivery. It is these two pain points that Zomato is trying to address with Zomato UPI.
The report also said that the foodtech major received regulatory nod from the authorities earlier this year, and subsequently decided to partner with ICICI Bank for its tech infrastructure to roll out the UPI service. Zomato customers have reportedly been demanding the feature for a long time now.
Meanwhile, The Economic Times reported that having an in-house UPI offering would cut the dependency of Zomato on other payment aggregators. It will also help it stave off a future scenario in which digital payment giants start charging food delivery aggregators.
The development comes close on the heels of reports saying that Flipkart is also mulling launching an in-app UPI payments feature. Citing sources, The Arc reported that the ecommerce giant is looking to add its third-party UPI functionality to its app prior to the festive sale season.
A company insider was quoted as saying that the new launch is merely a customer engagement tool and not a serious digital payments play by Flipkart.
Inc42 has reached out to Flipkart for a comment. This story will be updated on receiving a response from the company.
A slew of companies are embracing UPI at a time when the National Payments Corporation of India (NPCI) plans to onboard more consumer-facing companies to its network to curb the dominance of giants such as PhonePe, Google Pay and Paytm.
These three players together account for more than 95% of UPI transactions and have made the Indian digital payments space a near total triopoly.
Zomato’s Pilot Play
The move to partner with ICICI Bank comes nearly two years after Zomato established a subsidiary called Zomato Payments to offer digital payment services.
The foodtech giant could be looking at leveraging the huge traffic flow through its systems to spur online payments in a big way. In 2022, Zomato had 5.8 Cr annual transacting users, while it processed a gross merchandise value (GMV) of more than $2.8 Bn during FY22.
With the payments play, Zomato could also be looking at cutting the reliance on digital payment giants.
The new UPI pilot is part of a larger game of experiments that Zomato seems to be playing. Earlier this month, the foodtech major forayed into the logistics space with the pilot launch of B2B (business-to-business) logistics services.
Zomato’s quick-commerce arm Blinkit was also looking at venturing into the at-home services segment, on the lines of Urban Company, to expand its portfolio. Besides, the foodtech major last year piloted an inter-city food delivery service called Legends and unveiled a home-cooked meals service for students and employees.
Zomato and Flipkart are respective giants in the foodtech and ecommerce spaces. Both players reportedly own almost half of the market share in their respective domains and have a long line of customers and billions of dollars worth of GMV. With the new offerings, the two players could be looking at pulling the market away from other players.