The leading food delivery platform Zomato has received approval from the Reserve Bank of India (RBI) to operate as a payment aggregator. This marks a positive development for Zomato, which has been actively pursuing this license.
As disclosed in a stock exchange filing on Thursday, the authorization comes into effect from January 24, 2024. Zomato had taken proactive steps to comply with RBI regulations, incorporating a wholly-owned subsidiary named Zomato Payments Pvt Ltd in August 2021 specifically for payment aggregator services and payment gateway services.
It’s noteworthy that the recent notification from RBI does not explicitly mention the payment gateway aspect. Zomato’s strategic move to collaborate with ICICI Bank in May of the previous year resulted in the introduction of Zomato UPI, its unified payments interface solution. Initially rolled out to select users without a KYC process, this feature aimed to streamline the payment process within the Zomato platform.
With this approval, Zomato joins the ranks of leading players like Razorpay, Cashfree, Open, and Enkash in the realm of online payment aggregation platforms.
Zomato’s journey has been marked by a significant turnaround, as the company achieved profitability for the first time in the first quarter of FY24. The profit after tax surged by 18-fold to Rs 36 crore in the second quarter of the current fiscal year (Q2 FY24).
In the September quarter, Zomato witnessed an impressive 18% growth in revenue, reaching Rs 2,848 crore, up from Rs 2,416 crore in the preceding June quarter.
Reflecting on the company’s performance, Zomato’s share price, which peaked at around Rs 155 in November 2021, experienced a dip below Rs 50 in July 2022. However, with robust financials and a positive bottom line, the firm is regaining momentum. As of now, Zomato’s share price hovers around Rs 136, with a market capitalization exceeding Rs 1,17,000 crore or $14 billion.
Source: Startup Story
