Zomato rolls out its own UPI offerings with ICICI Bank

Deepinder Goyal, co-founder of Gurugram-based Zomato.

Food and grocery delivery company Zomato has rolled out its own unified payments interface (UPI) offering, called Zomato UPI, which it has launched in partnership with ICICI Bank, according to the company’s website.

With the introduction of Zomato UPI, customers can now sign up to create a new UPI ID after which they will be able to make payments by staying on the Zomato app itself, and will not be redirected to another app like Google Pay, PhonePe, or others, as is the case for certain users currently.

Zomato is also hopeful that customers find the new arrangement less cumbersome and increasingly opt to make UPI payments, moving away from cash on delivery (COD) orders, a person in the know said. COD orders are difficult to manage and come with an added cost of handling the money, which Zomato is trying to eliminate. There are also risks that a customer refuses to accept an order if they've opted for a COD option.

Zomato UPI was a feature that customers have long-requested, Moneycontrol has learnt. The Gurugram-based company received regulatory approvals earlier this year and then partnered with ICICI Bank, one of the largest private banks in the country, for the tech infrastructure required for Zomato UPI, according to people in the know.

For now, Zomato UPI is only a pilot of sorts and depending on the adoption rate and customer stickiness, the company will either approach more banks or go slow with the rollout.

It is also important to note that with Zomato UPI, the company will gain more control over the success rate of payments and rely less on third-party apps and their functioning, which can push up customer satisfaction at a time when the food delivery market is slowing.

Confirming the development, “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),” a company spokesperson told Moneycontrol.

Reducing the reliance on other apps was especially crucial given than the entire UPI market is majorly controlled by PhonePe, Google Pay and Paytm, who together command a market share of around 97 percent as April data. The others like WhatsApp Payments, which saw a spike during initial days, have found it difficult to hold their ground especially after coupons and offers were stopped, accounted for the remaining three percent or so.