Zomato has decided to voluntarily surrender the online payment aggregator and prepaid payment instruments licences to the Reserve Bank of India. For this, it has recorded an impairment loss of Rs 39 crore for its investment in its fintech subsidiary Zomato Payment Private Limited (ZPPL).
The prepaid payment instrument licence allowed Zomato to offer wallet and cash cards services to its customers, while the online payment aggregator licence allowed the platform to have higher control over payments on its platform, in addition to having third-party apps.
“At Zomato, we do not see ourselves having a significant competitive advantage against the incumbents in the payments space and hence we don’t foresee a business in payment space as commercially viable for us, at this stage. While we were conscious of these developments as they unfolded, the real impact was more apparent as we got closer to putting in place the structure to commence the operations,” the company said.
However, the other operations of ZPPL will continue. Zomato had earlier partnered with ICICI Bank to offer its own unified payment service, Zomato UPI, aiming to reduce the use of third-party UPI apps on its platform, after incorporating its fintech subsidiary ZPPL in 2021.
