Zomato Payments Has Relinquished the Payment Aggregator License Granted By the RBI Earlier This Year

Zomato Payments gives up RBI license

Three points you will get to know in this article:

  • Zomato Payments Pvt Ltd forfeits online payment licenses, causing Rs 39 crore loss.
  • Zomato prioritizes UPI transactions for digital payments control.
  • Company’s profit is Rs 175 crore after taxes with 71% revenue increase to Rs 12,114 crore in FY24.

Zomato Payments Private Limited Relinquishes Payment Licenses

Zomato Payments Private Limited (ZPPL), a branch of the renowned food delivery service Zomato, has chosen to give up its online payment aggregator (PA) license, which it acquired from the Reserve Bank of India (RBI) on January 25, 2024. This decision also involves withdrawing their application for a license to issue prepaid payment instruments, for which they had previously obtained provisional approval from the RBI.

Financial Impact of License Revocation

The revocation of these licenses has resulted in a substantial financial impact for Zomato, notably a reported impairment loss of Rs 39 crore. This amount was recorded in the company’s profit and loss statement as an exceptional item, following an impairment evaluation in accordance with Ind AS 36 guidelines.

Although ZPPL has stepped out of these specific regulatory frameworks, rest assured, the company pledges to maintain its ongoing operations. Founded in August 2021, ZPPL originally aimed to deliver digital payment solutions such as wallets and payment gateways.

Meanwhile, Zomato remains committed to facilitating payments via the Unified Payments Interface (UPI) in partnership with ICICI Bank. This encompasses both merchant transactions and peer-to-peer transfers.

Smart Business Moves: Breaking Free from Third-Party Payment Services

The licenses were granted so that Zomato could handle online payments on its own, allowing it to offer convenient services like digital wallets and cash cards directly to its customers. This smart move was aimed at cutting down on expenses linked with using third-party payment services and avoiding merchant charges, while also giving Zomato more control over its digital payment processes.

Impressive Profit and Revenue Growth

But despite these shifts, Zomato is going strong in its overall business. Just recently, the company shared some exciting news: they made a profit of Rs 175 crore after taxes, raking in a whopping revenue of Rs 3,562 crore for Q4 FY24. And that’s not all—Zomato’s yearly revenue skyrocketed by a whopping 71%, reaching Rs 12,114 crore in FY24 compared to Rs 7,079 crore in FY23.

Zomato Payments Private Limited (ZPPL) relinquished its online payment licenses to give up the online payment aggregator (PA) license acquired from the Reserve Bank of India, resulting in a Rs 39 crore impairment loss. Despite these shifts, ZPPL ensures continuous operations. Zomato remains committed to Unified Payments Interface (UPI) transactions, aiming to enhance control over digital payment processes. The company’s profit after taxes amounted to Rs 175 crore, with a remarkable 71% annual revenue growth, soaring to Rs 12,114 crore in FY24 from Rs 7,079 crore in FY23.

Karan Balodi

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