Zomato to launch cashless payment service in Dubai

Gurgaon-based Zomato, one of the fastest growing start-ups in India, will unveil its cashless payment service in Dubai next month

Zomato, the Indian restaurant search service, cannot introduce its latest innovation — cashless payment service — in India because of stringent credit card payment guidelines of the Reserve Bank of India (RBI). US-based taxi aggregator Uber, too, had faced the same problem when it entered India last year.

Gurgaon-based Zomato, one of the fastest growing start-ups in India, is set to unveil its cashless payment service in Dubai next month. “We will start with Dubai, and see how it goes. We may look at India for this services at a later stage, depending on how things develop,” said Zomato’s co-founder Deepinder Goyal, referring to the regulatory hurdles.

Cashless payment services are seen as a strong revenue contributor for Zomato, as the company will get a commission from restaurants for each transaction.

The company is reported to be raising $80-100 million in a fresh round of funding for expansions in certain countries; it is also hiring people. However, Goyal has declined any possibility of ‘immediate’ fundraising for the company. According to him, the company is well funded for its capital requirements for the immediate future.

Zomato has already added the payment option to its existing mobile application that would allow users to pay their restaurant bills through the app without exchanging cash. However, the feature is still inactive in the app that gets about 12 million visitors a month. Zomato lists more than 60,000 restaurants across 36 cities in India.

RBI guidelines mandate two-step authentication on credit cards. The new rules came in force in August 2014 for all transactions made through credit cards irrespective of the value. While it ensures better security for consumers, it is looked as cumbersome by the business community.

However, there are mobile payment service companies such as iKaaz that are launching cashless mobile payment services in India in partnership with banks.

Uber had started its service after partnering with mobile payment solution provider Paytm in November 2014. Here, a customer has his/her money pre-loaded on to the mobile wallet account and the stored cash is being used to complete transactions.

Zomato is already present in 22 countries through acquisitions. The firm has acquired six ventures in the past six months. The latest being US-based restaurant search guide Urbanspoon for $52 million, which could potentially take on Yelp. Other acquisitions include MenuMania in New Zealand, Lunchtime in the Czech Republic, Obedovat in Slovakia, and Gastronauci in Poland.

About 75 per cent of Zomato’s revenue comes from India and the United Arab Emirates and close to 45 per cent of visitors check Zomato on mobile devices. According to the company’s filings with the Registrar of Companies, Zomato had revenue of Rs 36.11 crore in the financial year ended March 2014, a three-fold rise from Rs 12.29 crore in the previous year.