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Foodtech major Zomato has notified the stock exchanges that it has incorporated a new entity — Zomato Payments Private Limited (ZPPL) — as its payment and technology service.

Zomato said the objective of incorporating the wholly-owned subsidiary is to carry on the business of providing payment aggregator services and payment gateway services following the guidelines of the Reserve Bank of India. 

The subsidiary has been incorporated with an initial subscription of 10,000 equity shares of Rs 10 each, aggregating to Rs 1,00,000, according to Zomato’s filing.

Zomato Payments will issue, implement, undertake, assist, offer, distribute, or otherwise promote such services, schemes, and projects, including all types of electronic and virtual payment systems, e-wallets, mobile wallets, and cash cards to the consumers.

It also said that the company will also set up a payment and settlement system, payment gateway, services, prepaid and post-paid payment instruments, closed/semi-closed systems payment instruments, direct debit facility on mobile phones, payment solutions for all goods and services and utility bills through mobile phone under the subsidiary.

The Reserve Bank of India in its Annual Report 2020-21 said the COVID-19 pandemic has fast-tracked digital transformation of the payments ecosystem in India. Besides augmenting the broad-based use of technology, the pandemic has fuelled the proliferation of digital modes of payment, propelling the country towards ‘less-cash alternatives.

Overall, the total digital transaction volume in 2020-21 rose to Rs 4,371 crore, as against Rs 3,412 crore in 2019-20. Some of the prominent players in the payments space include Paytm, PhonePe, Amazon Pay, and WhatsApp Pay.

Zomato recently became India’s first tech unicorn to go public. On July 23, Zomato opened at Rs 116 per share on NSE and rose rapidly to a level of Rs 138, before closing at Rs 125.

The foodtech giant exceeded all expectations on day one with a 66 percent rise in share price and a market capitalisation of little more than Rs 98,000 crore ($13 billion approximately). On Thursday, the last opening price of Zomato stood at Rs 138.60.