Online food delivery platform Zomato has now partnered with ICICI Bank to become a third-party application provider for Unified Interface Payment (UPI), reported Economic Times citing sources.
According to the report, the Gurugram-based company is offering the service to some of its users as of now. It will allow users to make both merchant and peer-to-peer payments.
The report citing sources also added that e-commerce platform Flipkart is also hopping on the bandwagon and has started its work for UPI offerings.
The move aims to provide better service to consumers of both Flipkart and Zomato via their UPI offerings, the report added.
In September 2022, Economic Times mentioned in another report that both Zomato and Swiggy were planning to enter into the third-party application space, by providing UPI offerings to their customers.
It also stated that the UPI offerings are part of an attempt by the National Payments Corporation of India (NPCI) to bring large consumer internet companies to the network to reduce dependency on Walmart-owned PhonePe and Gpay, which are currently the leaders in terms of UPI transaction market share.
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With the intention to break PhonePe and Gpay's hegemony, which together had control over 80 per cent of the market share, the NPCI proposed a 30 per cent cap on the market share of payment volumes for third-party applications. While this was expected to be implemented in December 2022, it was, however, deferred for two years.
Zomato spokesperson spoke to ET and added, "Zomato has a large set of customers that frequently use UPI to make payments for their food orders. We are providing a facility (as a technology partner to ICICI) for customers to create a UPI ID on the Zomato app so that they can make payments seamlessly (without the need to switch apps). There are no plans to tie up with more banks in the near future."
Online food aggregator Zomato also has a subsidiary, Zomato Payments, which was set up to operate and offer digital payment services. The company also allows customers to pay via app at some restaurants directly, through Zomato Pay. Customers can choose from various options such as cards, UPI, net banking, etc to make the payment directly.