Zomato writes down investment in fintech arm; surrenders PA, wallet licence to RBI

Foodtech major Zomato registered a loss of Rs 39 crore in the March quarter as it wrote down its investment in fintech subsidiary Zomato Payment Private Limited (ZPPL).

“The company has performed the impairment assessment under Ind AS 36 and recognised an impairment loss of Rs 39 crore in the profit and loss
account (as exceptional item) on its investment in ZPPL,” the filings read.

Further, the filings showed that the fintech arm surrendered its recently-secured online payment aggregator (PA) and prepaid payment instrument (PPI) licenses to the Reserve Bank of India (RBI).

The licences allowed Zomato to process online payments by itself and offer wallet, cash cards, etc. services to its customers, giving it more in-house control over digital payments alongside third-party apps. The idea was reducing costs associated with third-party payment services, both gateways and payments apps, and save on merchant charges.

“ZPPL has decided to voluntarily surrender the certificate of authorisation obtained from the RBI to operate as an online payment aggregator under the Payment and Settlements Systems Act 2007,” the filings read.

“Further, ZPPL has also decided voluntarily surrender its application to the RBI (for which it previously received in-principle authorization) to operate as an issuer of pre-paid payment instruments under the Payments and Settlement Systems Act 2007 and the Master Direction on Prepaid Payment Instruments,” it added.

However, the other operations of ZPPL will continue.

The online food and grocery delivery major had incorporated ZPPL in August 2021 with an authorised share capital of Rs 20 crore.

Last year, the company rolled out its own unified payments interface (UPI) offering, called Zomato UPI, in partnership with ICICI Bank.