Zomato temporarily suspends rollout of UPI enrolment for new users

The rollout is on hold as the company is working to improve the onboarding process

Zomato, the food and grocery delivery platform, has temporarily stopped accepting new users for its UPI-based payment application called Zomato UPI. The sign-up option for Zomato UPI has been disabled for the past 3-4 weeks. However, existing users can still use the service.

Zomato decided to suspend onboarding new users for Zomato UPI to incorporate feedback and improve the onboarding process, according to a report by the Economic Times. They plan to start enrolling new users again by the end of the month.

Zomato introduced its own UPI offering to allow users on its platforms to make seamless payments without switching apps. Besides online food orders, Zomato also provides the option for customers to make payments at certain restaurants listed on the platform using different payment methods like cards, net banking, UPI, and more, known as Zomato Pay.

Zomato established a subsidiary called Zomato Payments Pvt Ltd in August 2021 to offer digital payment services such as e-wallets and payment gateway services. In 2022, they had 58 million annual transacting customers for food ordering.

Zomato's entry into the UPI market occurred when the National Payments Corporation of India was looking to expand the ecosystem by adding more players. Currently, PhonePe and Gpay dominate the digital payments space, accounting for over 80 per cent of UPI-based transactions.

Despite having this popular feature disabled for weeks now, Zomato is still expected to outperform the majority of quick-service restaurants, according to an ICICI Securities report.

In addition, Zomato has also introduced new features to its apps to better compete against Swiggy for market shares. Much like Phonepe's Pincode feature, which allows consumers to build carts across categories, Zomato will also allow consumers to build carts for up to four restaurants.