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Zomato, Stripe secure final RBI nod for online payment aggregator

Zomato Payments, a subsidiary fully owned by Zomato Limited, has been granted the certificate of authorization by the Reserve Bank of India to function as an online payment aggregator. According to a filing with the exchange, the food delivery platform announced that the central bank has permitted it to engage in payment aggregation business, effective from January 24, 2024.

“Pursuant to our earlier disclosure dated August 4, 2021 regarding the incorporation of Zomato Payments Private Limited (“ZPPL”), a wholly owned subsidiary of Zomato Limited (“the Company”) to carry out the business, inter alia, as payment aggregator and issuer of pre-paid payment instruments, we wish to inform that ZPPL has been granted certificate of authorization dated January 24, 2024, from the Reserve Bank of India (“RBI”) to operate as an ‘Online Payment Aggregator’ in India with effect from January 24, 2024, as per the guidelines issued by the RBI,” the filing said.
In the previous year, Zomato collaborated with ICICI Bank to introduce its unified payments interface (UPI) service, called Zomato UPI. This offering was made available to a specific group of users and did not require a KYC process. It streamlined the payment process for users by eliminating the necessity to switch to other payment applications like Google Pay, Paytm, and PhonePe when placing orders on Zomato.The company emphasized that this feature ensures secure transactions and users can further enhance security by setting up a security PIN for their accounts..
“Zomato has a large set of customers that frequently use UPI to make payments for their food orders. We are providing a facility (as technology partner to ICICI) for customers to create a UPI id on Zomato app so that they can make payments seamlessly (without the need to switch apps),” a company spokesperson said last year.

In line with Tata Pay, Razorpay, Cashfree, and others, Zomato has successfully obtained the long-awaited payments license. Earlier this month, Tata Payments and Bengaluru-based identity verification startup DigiO also acquired the payment aggregator (PA) license from the RBI. With this license, it is anticipated that the diversified conglomerate will facilitate payment processing for its e-commerce transactions. Furthermore, in December 2023, Razorpay and Cashfree received the final approval from the Reserve Bank of India to operate as payment aggregators following nearly a year-long embargo.

Razorpay, in a statement, said: “Having received the new PA licence, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions. We welcome this new development and are delighted to be one of the first Payment Gateways to have received the final PA licence from the RBI.”
In its statement, Cashfree Payments said: “Securing the Payment Aggregator (PA) licence from the RBI is a pivotal moment for Cashfree Payments, affirming our focus on compliance and highlighting the significance of a well-regulated payments landscape. We are now onboarding new merchants on our payment gateway. We are very excited about this new phase of our journey, where we continue to drive exponential growth and retain our market leadership as the preferred aggregator in the payments space.

Disclaimer: The views expressed in this feature article are of the author. This is not meant to be an advisory to purchase or invest in products, services or solutions of a particular type or, those promoted and sold by a particular company, their legal subsidiary in India or their channel partners. No warranty or any other liability is either expressed or implied.
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