Zomato Inks Partnership With ICICI Bank To Launch Its Own UPI Offering

Food aggregator platform Zomato has partnered with ICICI Bank to launch its very own unified payments interface (UPI) offering called Zomato UPI, for some of its users.

Using the new service, customers can pay for their orders directly through the Zomato app – by creating their own UPI ID – without being redirected to other payment gateways like Phonepe, Google Pay, or any other third-party app. Users will be able to make both, peer-to-peer, as well as merchant payments using the service.

Currently, Zomato UPI has been rolled out to select users only. Further expansion of the service will hinge on the initial customer response.

“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),” said a Zomato spokesperson.

An in-house payment gateway will allow Zomato to exercise better control over the payments taking place on its platform, and can be interpreted as a push from the firm to reduce cash on delivery orders.  

Homegrown e-commerce giant Flipkart has reportedly also been in talks to hop on the UPI bandwagon. According to reports, the company is working on its own UPI offering.

This isn’t Zomato’s first rodeo in the payments sphere. The Gurugram-based firm had, in November last year, also rolled out the third iteration of its dining out program – Zomato Pay, using which customers can make payments at some of its partner restaurants and avail some cashbacks and offers. However, this is not a UPI offering. Customers can make payments using various methods like net banking, cards or even UPI.

This comes at a time when fintech firms across the country are finding it challenging to acquire NBFC licences, as the RBI has tightened its lending norms. The licence applications of fintech bigwigs like Phonepe, Paytm, Bharatpe, and Razorpay have reportedly been rejected in the recent past amid increased scrutiny.

Zomato, however, garnered approvals for its UPI service sometime earlier this year, before joining hands with ICICI Bank to bolster its payments infrastructure, people aware of the development revealed.

According to data from the National Payments Corporation of India (NPCI), as of April 2023, the trio of Phonepe, Google Pay and Paytm command a 97 per cent share of the digital payments market in India, with almost 863 crore transactions across the three of them.

Phonepe has been and remains the top dog in the space, with a 50.47 per cent market share in terms of transaction value. Google Pay stood at 22.69 per cent, while Paytm trailed in third place.

Newcomers in the space like Meta’s Whatsapp Pay have not been able to make a dent in the market, even after getting the NPCI nod to expand its services to over 100 million users in the country.