The National Restaurant Association of India (NRAI) has reportedly written to its members in the country alleging that online food delivery services Zomato and Swiggy are making money through their discount schemes, at the expense of restaurants. According to a report, the NRAI notice refers to the Zomato Pay and Swiggy Diner programs, which would incentivize restaurants to offer discounts, while paying commissions on transactions. Swiggy Diner allows customers to reserve tables at discounted prices, while Zomato Pay is the company’s payment service offered to customers.
According to a PTI report, the NRAI notice alleges that Zomato Pay and Swiggy Diner do not charge a subscription fee for customers to participate, while diners must offer discounts of up to 40% on the program.
Restaurants must also pay a commission of up to 12% on transactions made through payment gateways, while other gateways across the country charge a maximum of 1.5%, the NRAI reportedly claimed in its notice.
The advisory also asks why restaurants have to pay a commission to a “middleman” to offer discounts to their own customers. It also alleges that restaurants must offer discounts to customers paying through the programs, even if they entered the restaurant alone, according to the report.
Zomato offers an online payment mechanism called Zomato Pay, which allows users to transact seamlessly on the service, while users can also pay using regular payment methods. On the other hand, Swiggy Diner is the company’s service for reserving tables in restaurants at discounted rates.
“With our new catering product, which has now been living in Hyderabad for a few weeks with excellent results, we are confident that we will create tremendous value and growth for the industry,” a Zomato spokesperson told PTI. , adding that the company looks forward to working with “progressive restaurants that see the big picture.” The report says a spokesperson for Swiggy did not respond to a request for comment on the NRAI allegations.