Leveraging the fintech phenomena that India’s UPI has come to be known globally, several online commerce platforms are now quickly lining up to create their own UPI-based payment solutions for their own as well as other payment services through their platforms. While Walmart-owned Flipkart is rumoured to be launching something soon, food and grocery delivery platform Zomato has just announced its UPI-based payments system today.
Zomato has joined forces with ICICI Bank to launch its UPI offering – called Zomato UPI – to become the first online food and grocery delivery app to offer UPI services for some of its users in India.
Flipkart is also working to roll out its own UPI offering and offer an improved user experience. In short, the Indian fintech space is set to witness a seismic shift as two industry giants, Zomato and Flipkart, enter the UPI arena with their respective offerings. With Zomato recently introducing its UPI solution and Flipkart reportedly working on its own, the implications and effects on the Indian fintech landscape are bound to be significant. As these major players bring their extensive customer base and market influence into the digital payments realm, the stage is set for intensified competition and innovation, ultimately benefiting consumers and transforming the way financial transactions are conducted.
With Zomato UPI, users can make merchant and peer-to-peer payments alike. Furthermore, they can sign up to create a new UPI ID after which they will be able to make payments by staying on the Zomato app itself, instead of being redirected to other apps such as Google Pay, PhonePe, or others. “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 spokesperson for Zomato said, confirming the development.
The introduction of Zomato UPI brings forth a host of implications for both Zomato and its customers. By offering an in-app UPI solution, Zomato aims to retain its customers within its ecosystem and eliminate the need for redirection to external payment apps. Furthermore, it possesses the potential to pose a challenge to existing third-party payment platforms like Google Pay and PhonePe.
Zomato’s decision to bypass these intermediaries and offer its own UPI solution could impact the market dynamics and pose a challenge to established players. This move not only gives Zomato more control over the payment process but also opens up opportunities for partnership and revenue generation within the fintech space. Considering that PhonePe, Google Pay, and Paytm rank among some of the top UPI apps in India, this move to reduce its reliance on other apps is likely to pay dividends for Zomato.
The National Payments Corporation of India (NPCI) is in charge of providing a safe, secure and efficient UPI system and network in India. And currently, it is attempting to chip away at the dominance of some of the biggest players in the sector by diversifying the UPI sector and bringing in other consumer internet companies to the network. In this vein, it proposed a cap of 30% on the market share of payment volumes, but later deferred its implementation to December 2024.
