The National Restaurant Association of India (NRAI) has written to its members in the country alleging that online food delivery services Zomato and Swiggy are making money at the expense of restaurants through their discount programs. According to a report, the advisory by NRAI refers to the Zomato Pay and Swiggy Diner programs, which are said to offer discounts to restaurants while paying commission fees on transactions. While Swiggy Diner allows customers to book a table at a discount, Zomato Pay is the company’s payment service for customers.
According to a PTI report, the NRAI’s advisory alleged that while both Zomato Pay and Swiggy Diner do not charge customers a subscription fee to participate, restaurant owners are required to offer up to 40 percent discount on the program.
Restaurants will also have to pay a 12 percent commission on transactions made through the payment gateway, while other gateways in the country charge a maximum of 1.5 percent, NRAI claimed in its advisory.
The advisory also questions why restaurants should pay commissions to “middlemen” to offer discounts to their own customers. According to the report, restaurants are required to offer discounts to customers who pay through the program, even if they visit the restaurant themselves, it is alleged.
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 Dinner is a company’s service to book a table at a restaurant at a discounted rate.
“With our new dining product, now live in Hyderabad with great results for a few weeks, we are confident that we will create tremendous value and growth for the industry,” a Zomato spokesperson told PTI, adding that the company is keen to work. With a “progressive restaurant that looks at the big picture”. The report states that Swiggy’s spokesperson did not respond to NRAI’s request for comment on the matter.