Zomato on Monday said its subsidiary Zomato Payment Pvt. Ltd. (ZPPL) has decided to surrender the authorization it received from the Reserve Bank of India (RBI) to function as an online Payment Aggregator (PA). It has also surrendered the application for wallet license.
The company has decided to surrender the PA license as it doesn’t see having a “significant competitive advantage” in the payments space, according to a regulatory filing.
The Gurgaon-based company has also written down Rs. 39 crore, which it invested in Zomato Payments, a fully-owned subsidiary that had the PA license.
Zomato, however, said that other operations of the payment subsidiary will continue.
The development occurred months after the company was granted permission by the central bank to function as an online payment aggregator, from January 24, 2024.
According to Zomato, ZPPL’s Board of Directors has also decided to withdraw the application submitted to the RBI on November 11, 2021, to operate as a prepaid payment instrument issuer.
To conduct business as a payment aggregator and an issuer of prepaid payment instruments, Zomato announced the establishment of ZPPL as a wholly-owned subsidiary in 2021.
In a regulatory filing, Zomato said, “the payments landscape in India has evolved meaningfully over the past couple of years since the time we applied for these licenses. This has over time, therefore, resulted in a seamless payment experience for customers.”
The company says that the true impact of entering the payments business became more clear once they started setting up the necessary structures to commence this business.
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The company further said this disclosure is being made voluntarily because it believes that such voluntary surrender and withdrawal will not have a material impact on the company’s revenue or operations.
Zomato also thanked the RBI’s efforts because of which the payments landscape in India has changed significantly over the past few years since it filed for these licenses. “This has over time, therefore, resulted in a seamless payment experience for customers,” said Zomato.
The company believes that such voluntary surrender and withdrawal have no material impact on the company’s revenue/operations, so this disclosure is made voluntarily, it added.
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