Food delivery platform Zomato has received the Reserve Bank of India’s nod to carry out business as payment aggregator and issuer of pre-paid payment instruments. This is a positive development for the company which has been looking for the license for a long time.
In a stock exchange filing on Thursday, Zomato said that the authorisation comes into effect from January 24, 2024.
To recall, Zomato had incorporated a wholly-owned subsidiary called Zomato Payments Pvt Ltd in August 2021 to comply with RBI regulations for payment aggregator services and payment gateway services. However, the latest notification from RBI did not mention about the payment gateway.
In May last year, Zomato collaborated with ICICI Bank to introduce its own unified payments interface (UPI) solution—Zomato UPI. Initially offered to select users without a KYC process, this feature streamlined the payment process for Zomato users, eliminating the need to switch to other payment apps like Google Pay, Paytm, and PhonePe while placing orders on the platform.
With this, Zomato has joined the likes of Razorpay, Cashfree, Open and Enkash to operate as an online payment aggregation platform.
After incurring losses since inception, Zomato turned profitable for the first time in the first quarter of FY24. The Deepinder Goyal-led firm also saw its profit after tax increase by 18-fold to Rs 36 crore in the second quarter of the current fiscal year or Q2 FY24.
The Gurugram-based company registered a nearly 18% jump in its revenue to Rs 2,848 crore in the September quarter against Rs 2,416 crore during the June quarter.
Zomato’s share price was at its peak (Rs 155 approximately) in November 2021 which later collapsed under Rs 50 in July 2022. On the back of healthy financials along with a positive bottom line, the firm is now getting its momentum back as its current share price is roaming around Rs 136 each with a market capitalization of over Rs 1,17,000 Cr or $14 billion.