The payments unit of foodtech major Zomato Ltd. will voluntarily surrender the licence it obtained from the Reserve Bank of India to operate as an online payment aggregator, citing lack of competitive advantage.
Zomato Payment Pvt. will surrender the certificate of authorisation issued by the RBI and withdraw the application dated Nov. 11, 2021, to operate as the issuer of prepaid payment instruments, according to an exchange filing on Monday.
“At Zomato, we do not see ourselves having a significant competitive advantage against the incumbents in the payments space and hence, we don’t foresee a business in payments space as commercially viable for us, at this stage,” the company said.
“While we were conscious of these developments as they unfolded, the real impact was more apparent as we got closer to putting in place the structure to commence the operations,” the statement added.
The development comes months after the company received the licence from the central bank to operate as an online payment aggregator, with effect from Jan. 24.
The RBI introduced a payment aggregator framework in March 2020. It was made mandatory that payment gateways obtain a licence to acquire merchants and offer digital payment acceptance solutions.
Zomato announced the incorporation of ZPPL in 2021 as its wholly owned subsidiary to carry out the business as a payment aggregator and an issuer of prepaid payment instruments.
The company expects no material impact on the revenue/operations of the company on account of such voluntary surrender and withdrawal, hence this disclosure is being made voluntarily, it added.
Zomato Q4 Earnings Highlights (Consolidated, QoQ)
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Net profit at Rs 175 crore versus Rs 138 crore.
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Revenue at Rs 3,562 crore versus Rs 3,288 crore.
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Ebitda at Rs 86 crore versus Rs 51 crore.
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Ebitda margin at 2.4% vs 1.6%.
Zomato’s net profit grew by 27% in the January–March period, as the food delivery giant continued to expand its top line and profitability across its businesses.
The Gurugram-based company marked its fourth consecutive profitable quarter on a consolidated basis.
(With inputs from PTI)