Zomato Expands Payment Services with UPI Integration, Terminates RBL Bank Collaboration

• ByStartupStory     |    May 16, 2023

Zomato, the renowned food and grocery delivery platform, has commenced its operations as a third-party application provider for Unified Payments Interface (UPI) payments. In collaboration with ICICI Bank, Zomato will facilitate both merchant and peer-to-peer payments, as stated on the National Payments Corporation of India’s (NPCI) website. This strategic step is anticipated to enable Zomato to introduce its own UPI offering for seamless payment transactions.

In August 2021, Zomato established Zomato Payments Pvt Ltd, a subsidiary company dedicated to providing digital payment services, which includes wallets and payment gateway solutions. Additionally, Zomato offers Zomato Pay, a feature that allows users to conveniently make payments through the Zomato app at specific restaurants.

Recently, Zomato terminated its collaboration with RBL Bank for co-branded Edition credit cards. Explaining the decision, the company highlighted its extensive customer base that frequently utilizes UPI as a payment method for food orders. As a technology partner to ICICI, Zomato now enables customers to effortlessly create a UPI ID within the Zomato app, eliminating the need to switch between applications for seamless payments.

In an effort to lessen reliance on PhonePe and Google Pay, which collectively dominate the UPI payments market with a market share exceeding 80%, NPCI has implemented a requirement stating that no entity should hold more than 30% of the market share in terms of payment volume on the UPI network. The deadline for compliance with this mandate has been extended to December 31, 2024. 

According to a report, Flipkart, which is owned by Walmart, is planning to launch its own UPI offering. Neu, Tata’s super app, also joined UPI last year. Other internet-based companies on the UPI network include Amazon, MakeMyTrip, and Facebook-owned Meta.

Kiwi, a newly established fintech platform, has become a part of the UPI network. The platform, co-founded by Siddharth Mehta (former CEO of Freecharge), Mohit Bedi (formerly with Axis Bank and PayU), and Anup Agrawal (former business head of LazyPay), recently unveiled its innovative offering called “Credit on UPI” on May 3. Kiwi has achieved the distinction of being the first app in India to issue RuPay cards in collaboration with banks, enabling customers to access credit through UPI.

Kiwi has successfully secured $6 million in pre-seed funding from prominent investors, including Nexus Venture Partners, Stellaris Venture Partners, and several angel investors. Swiggy, a direct competitor of Zomato, introduced Swiggy Money in collaboration with ICICI Bank in June 2022. The feature enables users to store funds in wallets, offering benefits such as instant refunds and convenient checkout options for food orders. In April 2023, UPI transactions attained a record-breaking volume of 890 crore successful transactions, marking a significant 59% increase compared to April 2022. Additionally, the value of these transactions surged by 49% to reach Rs 14.07 lakh crore, according to data from NPCI.

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