Zomato Takes the Lead with Zomato UPI, Flipkart to Follow Suit
Zomato and ICICI Bank Join Forces to Revolutionize Food Ordering Payments
16 May 2023
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Kunal Tyagi
Zomato has launched its own unified payments interface (UPI) called Zomato UPI, allowing customers to make seamless payments within the app.
The partnership with ICICI Bank provides a robust and secure payment infrastructure for Zomato UPI.
Zomato's move reduces reliance on dominant players in the UPI market and promotes competition and customer choice.
Food and grocery delivery giant Zomato has recently launched its own unified payments interface (UPI) service called Zomato UPI in partnership with ICICI Bank. This new feature allows customers to create a UPI ID within the Zomato app, eliminating the need to redirect to other payment apps such as Google Pay or PhonePe. Zomato aims to streamline the payment process, reduce the reliance on cash-on-delivery (COD) orders, and enhance customer satisfaction.
Zomato UPI fulfills a long-standing customer request, as users can now seamlessly make payments within the Zomato app. By reducing the complexity associated with third-party apps, Zomato hopes to encourage more customers to adopt UPI payments instead of relying on COD. The elimination of COD orders can streamline operations for Zomato, as handling cash involves additional costs and potential risks.
Zomato partnered with ICICI Bank, one of India's largest private banks, to establish the necessary technology infrastructure for Zomato UPI. This collaboration ensures a robust and secure payment system for customers. While currently in the pilot phase, Zomato plans to expand its partnership with other banks based on the adoption rate and customer loyalty.
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By introducing Zomato UPI, the company gains greater control over the payment success rate and reduces reliance on third-party apps. This move enhances customer satisfaction, especially in a market where the food delivery sector is experiencing a slowdown. With Zomato UPI, the company can deliver a seamless and efficient payment experience to its large customer base.
Zomato's initiative to offer its own UPI payment solution is a step towards reducing dependency on dominant players like PhonePe, Google Pay, and Paytm, which control around 97% of the UPI market. By providing an alternative, Zomato aims to increase competition and offer customers more choices. This move aligns with the National Payments Corporation of India's efforts to limit market share and promote a healthy competitive landscape.
Zomato's foray into the UPI payment space highlights the growing trend among consumer internet companies to establish their own UPI offerings. Flipkart, an e-commerce giant, is reportedly working on a similar venture. This shift allows companies to provide a more comprehensive customer experience and potentially mitigate future challenges such as merchant commissions. With the deadline to adhere to market share limits extended to December 2024, we can expect more players to introduce their own UPI offerings.
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