Deepinder Goyal, founder and CEO of restaurant listings website Zomato announced via Twitter on Monday that the company is launching its payments service in February, starting with Dubai.
The move has been long predicted, ever since an update to the app in September that added a category named Payments with a placeholder coming soon image as the actual functionality wasn't there.
At the time, Goyal also told NDTV Gadgets that Zomato was also working on a chat facility which would enable users to connect with restaurants and place orders for delivery. For now though, Zomato's Cashless Payments will roll out in Dubai, starting on February 1.
NDTV Gadgets contacted Goyal to learn more details about the upcoming service. According to the Zomato CEO, the service will save the user's credit card details in the app, and automatically complete the transaction at the time of payment, similar to the way people around the world pay Uber.
"The idea here is to enable cashless payments for restaurants," said Goyal. "The customer can process his payment of the bill through his smartphone rather than having to carry his payment card."
"The Zomato app will enable a diner to pay his bill and leave the restaurant without having to wait for the bill from the waiter," he added, "[or] having to wait for the waiter to swipe his bank card in the card readable payment machine and complete the transaction. By using the app a diner doesn't need to physically bring cash or a payment card to the participating restaurant."
When you go to a restaurant, you check-in with the Zomato app - each user has a unique identity, and the restaurant connects that to your bill. Of course, the system is not fully automated - you don't order through the app, but rather, inform the staff at the restaurant of your mode of payment at the time of ordering. The payment method integrates with the billing system of the restaurant, so the diner can order food as he normally would - and the billing happens automatically in the background.
According to Goyal, Dubai is an ideal test market for this new feature. "Credit card usage is extremely strong in Dubai," said Goyal, adding, "and there is no need for a two-step authentication process. We definitely plan to introduce it in India over the course of the year. Once we've introduced it in Dubai however, we'll get a better idea as to what we can expect when we roll it out on home turf."
It's worth noting that in India, government regulations will require an extra measure of authentication - you need to enter a password or PIN to complete the transaction. But Goyal feels that this won't necessarily be a problem to adoption.
"The Indian customer is now used to transacting with the OTP and the two step verification procedure," said Goyal. However, he added, "Recently, RBI declared that it is mulling removing the two-step verification procedure entirely for 'smaller transactions'. If the OTP or password is entirely removed this question will become irrelevant and our international workflow will be applicable in India as well."
(Also see: India Working to Fix E-Commerce Payments: Raghuram Rajan)
While this move from Zomato is interesting, and likely more convenient than the mobile wallet option that most sellers in India are taking, its success will depend on the number of participating restaurants. For example, Delhi-based website Ruplee offers similar services, but if you look at the company's site, you realise it has only 21 restaurants across Delhi and Gurgaon, and isn't active anywhere else in the country.
Zomato, with its pan-Indian reach and a large war chest of funds is obviously better placed to reach out to a wider selection of restaurants and convince them to get on board, but the eventual roll-out in India will depend on the performance of the service in Dubai, and perhaps other markets.