NRAI: Zomato Pay and Swiggy Diner Discount Programs are Against the Interests of Restaurant Owners

NRAI: Zomato Pay and Swiggy Diner Discount Programs are Against the Interests of Restaurant Owners
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The National Restaurant Association of India has written an advisory to its members against Zomato Pay and Swiggy Diner discount programmes saying these are against the interest of restaurant owners.

The advisory alleges that 'middlemen' Zomato and Swiggy are making money at the cost of restaurants, who sign up to be on the Zomato Pay and Swiggy Diner programmes by making them compulsorily offer discounts and also pay commission fee on every transaction on these platforms.

To be part of the program, restaurants must compulsorily offer a discount of 15-40% and pay a commission of 4-12% on every transaction made via the respective payment gateways to Zomato or Swiggy. In return, restaurants are promised higher footfalls.

The product brings no “tangible" value to restaurants or solve any pressing problems of the industry, NRAI, the representative body of restaurants, said. In fact, it warned, the programs will help Swiggy and Zomato get a “firm foothold" in the dine-in business, it added.

Zomato Pay works as a payment feature embedded within the Zomato app. Customers can choose to settle the bill using the feature and unlock offers such as cash-backs and discounts.

Last year, NRAI approached the Competition Commission of India with evidence to back allegations of anti-competitive practices such as data masking and charging of exorbitant commissions by food aggregators.

“There is absolutely nothing stopping Zomato and Swiggy increasing their discount requirements as well per- transaction commissions once that happens. They are currently funding the cash-backs to the customers, but that too can easily change,"

it said on Friday.

Source: India Today, Mint



digital markets  India 

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