Issuing an advisory to the restaurant fraternity over its concerns with Zomato Pay and Swiggy Diner, the industry body called them "bizarre".
Calling them “bizarre”, leading hotel industry body National Restaurant Association of India (NRAI) has cautioned restaurants from choosing to join the Zomato Pay and Swiggy Diner discount programmes.
Issuing an advisory to the fraternity, NRAI highlighted aspects of the programmes and the reason behind its call for caution.
What are Zomato Pay and Swiggy Diner?
Zomato Pay is a payment service that Zomato offers through an electronic payment mechanism. Through this service, customers can pay for an order to the merchant through the Zomato platform. Zomato is also offering "Zomato Vibes" with "Zomato Pay", in essence a social engagement tool.
Diner is a dine-in segment offering from Swiggy where customers can place dining reservations with discount offers.
Why has the NRAI cautioned restaurants?
NRAI said that customers are dazzled into paying bills via either Zomato Pay or Swiggy Diner due to “the deep discounts and generous cash backs”. The body called it “a deal too good to refuse at no cost”.
Restaurants will now have to mandatorily offer discounts ranging between 15-40 per cent to every customer who chooses to pay bills through these payment services, it said. This discount will be “borne entirely by the restaurant,” it added.
The body which has over five lakh restaurants in India as its members termed the affair “bizarre”.
“Restaurants pay a commission of 4-12 per cent (to begin with and this may move upwards as soon as adaption numbers grow) for permitting them to have Zomato/Swiggy`s payment gateways at their restaurants when several alternate options are available for much cheaper. Isn’t that bizarre?" the advisory said.
As a point of reference, fees charged by other payment gateways on such transactions ranges between 1 to 1.5 percent.
Bringing up the delivery market, it warned, “After being denied ownership of essential data of restaurant`s "delivery" customers, this will now open the flood gates for middlemen to colonise "dine-in" data. Your customers will eventually firmly become `their` customers.”
"Zomato Pay and Swiggy Diner both operate broadly on the same construct. This brings no tangible value to restaurants. It does not solve any pressing problems of the industry either," said the NRAI.
Response from Swiggy, Zomato
A Zomato spokesperson, while not answering on the subject, told PTI, “With our new dining product, now live in Hyderabad for a few weeks with great results, we are confident that we will create tremendous value and growth for the industry."
"We are looking forward to working with progressive restaurants who see the bigger picture,” the spokesperson added.
Swiggy has not responded on the specific issue.
READ | India surpasses UK to become world's fifth biggest economy, GDP to grow more than 7 per cent this year
(With inputs from PTI, IANS)
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