Zomato has announced that it is going to surrender the authorization certificate that its subsidiary Zomato Payment Pvt Ltd received from the Reserve Bank of India to operate as an online payment aggregator.
The statement by Zomato came as it realized that it does not see any inherent competitive advantage in the domain of payments, hence commercially not being viable for the company at present. Having made due consideration, the company had evaluated the ground position as it had moved ahead towards the building up of infrastructure to actually start operations, said the regulatory filing.
This move is on the heels of the central bank giving the license, which had become effective from January 24, 2024, to Zomato to operate as an online payment aggregator. The Board of Directors of ZPPL further decided to withdraw the application made to RBI in November 2021 to operate as the issuer of pre-paid payment instruments.
Zomato had formed ZPPL in 2021 as a wholly-owned arm to carry out business as a payment aggregator and issuer of prepaid payment instruments. It recognized that the payments domain in India had undergone a sea change, thanks to the effort of the RBI right from the time it had applied for these licenses. Zomato said the changes have provided a very seamless experience to customers in terms of payments.
Zomato, however, assured stakeholders that the current voluntary surrender and withdrawal would not materially impact the revenue or operations of the company. Therefore, the company had made the disclosure voluntarily.
The move was also announced on a day when Zomato disclosed its financial results for the quarter and fiscal year ended March.
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