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On Friday, the National Restaurant Association of India (NRAI) said that it was issuing an advisory to all its members on Zomato Pay and Swiggy Diner, the new discount products of the two companies.
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On Friday, the National Restaurant Association of India (NRAI) said that it was issuing an advisory to all its members on Zomato Pay and Swiggy Diner, the new discount products of the two companies.
NRAI confirmed its firm belief in its 'inherent responsibility' to appraise its members on the 'finer nuances' of the large-scale programmes and products since they impact the economic well-being of restaurants and can also 'adversely' impact the overall restaurant ecosystem in the long run.
NRAI in a public statement said, "While Swiggy has just entered the dine-in segment with the Swiggy Diner product, the principles governing it are similar if not the same as Zomato Pay. It is therefore imperative to look at both these products through the same lens."
NRAI added, “Both Zomato Pay and Swiggy Diner operate broadly on the same construct, restaurants must compulsorily offer a discount (in the range of 15 - 40%) to be part of the programmes and they must also compulsorily pay a commission (in the range of 4-12%) on every transaction made via respective payment gateways to Zomato or Swiggy. Restaurant must offer this discount to anyone who wishes to pay via Zomato Pay or Swiggy Diner irrespective of whether the customer discovered the restaurant on Zomato or Swiggy or just walked in on his own.”
Stating that the inherent 'numerical fault lines' needs no explanation, the NRAI said that it was 'bizarre' that restaurants had to pay a 4-12 per cent commission to get Zomato or Swiggy’s payment gateways at their restaurants when other cheaper alternatives existed.
In its advisory, NRAI said, "The fundamental question here is why should a restaurant pay a commission to a middle man to offer a discount to its own customer? The decision you make today as restaurateurs will have a long-term impact on the economics of the entire sector, we hope that your final choice reflects this."
The industry body has also been urging its members and wider restaurant fraternity to have conversations with industry colleagues, and exercise 'caution' as well as 'good judgement' before choosing to be part of these programmes.