Zomato, the online food ordering and restaurant discovery platform, is working to build its own digital payments and mobile wallet solution. The company plans to follow in the footsteps of larger internet peers such as Amazon, Flipkart and Ola to build its own payments network.
According to Business Standard, discussions around Zomato building its own digital wallet system began early this year when Ant Financial, a subsidiary of Chinese internet giant Alibaba, invested in the food tech company. Zomato now plans to roll out its own digital payments platform in the next two months and plans to start off by offering a mobile wallet solution. It will allow users to load money and spend on ordering food, and dine-in over the Zomato app.
Based on its adoption, the company plans to expand the payments solution to make payments for other services as well. Ant Financials had invested $150 million in Zomato in March, and also bought another $50 million worth of shares from Info Edge, which is the largest shareholder in the food tech company. Alibaba, the parent company of Ant Financials, is also the biggest backer of Paytm, India’s biggest digital payments platform.
The Gurgaon-based Zomato is reportedly working hard to build its payments platform and has even started hiring for payment and partnership roles. The effort is being led out of Mumbai and the primary goal behind a native payments platform is to boost customer retention and predictability of orders and spends, according to people familiar with Zomato’s plans.
Zomato already gives exclusive offers and cashback through its own wallets, integrated with its loyalty programs like Zomato Gold and Zomato Piggybank. The new payments platform is also likely to aid in tapping the large base of partners to drive in-restaurant digital payments via its own app. The company could extend benefits offered for online orders to offline orders as well, when customers pay using Zomato wallet.
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It is not clear what will happen to Zomato’s existing tie-up with wallet players such as Paytm, Mobikwik and FreeCharge. “People using Ola Money on Ola than a Paytm on Ola typically have a higher frequency of transactions. That’s the common logic,” said a senior executive with an online payments firm who requested anonymity. “Also as wallets are uploaded, the money comes to the company upfront. They can also save the money that does towards the charges of using third-party wallets.”
With the introduction of wallet platform, Zomato will take on Swiggy, its biggest rival in the industry, which has its own wallet called Swiggy Money. Zomato is trailing Swiggy, which has around 35-38 percent share in the online food ordering market. Zomato is estimated to have around 25-30 percent market share.