The Reserve Bank of India has granted Zomato Payments, a fully owned subsidiary of Zomato Limited, a certificate of authorization to function as an online payment aggregator. The meal delivery platform stated in an exchange filing that, as of January 24, 2024, the central bank has granted it permission to operate as a payment aggregator and issuer of pre-paid payment instruments.
"Pursuant to our earlier disclosure dated August 4, 2021 regarding the incorporation of Zomato Payments Private Limited (“ZPPL”), a wholly owned subsidiary of Zomato Limited (“the Company”) to carry out the business, inter alia, as payment aggregator and issuer of pre-paid payment instruments, we wish to inform that ZPPL has been granted certificate of authorization dated January 24, 2024, from the Reserve Bank of India (“RBI”) to operate as a ‘Online Payment Aggregator’ in India with effect from January 24, 2024, as per the guidelines issued by the RBI," the filing read.
Zomato and ICICI Bank collaborated to introduce Zomato UPI, a unified payments interface (UPI) product, last year. There was no KYC procedure and the feature was only available to a limited number of customers. It made it unnecessary for customers to use other payment apps to place orders on Zomato, like Paytm, Google Pay, and PhonePe. According to the company, adding a security PIN to an account can further secure it and make using the feature a secure means of completing transactions.
A sizable portion of Zomato's client base regularly pays for their meal orders via UPI. A company representative stated last year, "We are offering customers the option to create a UPI ID on the Zomato app (as our technology partner with ICICI) so they can make payments easily (without having to switch apps)." With this, Zomato was able to obtain the eagerly expected payments license, along with Tata Pay, Razorpay, Cashfree, and other companies.
The RBI granted the payment aggregator (PA) licence to Bengaluru-based identity verification company DigiO and Tata Payments earlier this month. It is anticipated that the conglomerate providing salt-to-software services will use the licence to handle payments for its online sales. After an embargo that lasted for over a year, Razorpay and Cashfree were finally given permission by the Reserve Bank of India to function as payment aggregators in December 2023.
"Having received the new PA license, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions," stated Razorpay in a statement. We are happy to be among the first Payment Gateways to obtain the RBI's final PA license, and we welcome this new step."
"Getting the Payment Aggregator (PA) license from the RBI is a crucial moment for Cashfree Payments, confirming our focus on compliance and underscoring the significance of a well-regulated payments landscape," the company said in a statement. New merchants are currently being added to our payment gateway. We are thrilled to be entering this new stage of our business, where we hope to maintain our market leadership as the go-to aggregator in the payments industry while also pursuing exponential growth."
At 3:15 PM, Zomato's shares were down 0.29%, trading at Rs 135.85. The shares of Zomato closed at Rs 130.05 on Wednesday after opening at Rs 131.75 on Thursday. The stock's 52-week high is Rs 141.55, and its 52-week low is Rs 44.35. It is currently valued at Rs 1,17,815.13 crore on the market.growth and hold onto our position as the go-to aggregator in the payments industry."
