Restaurant discovery portal, Zomato has announced yesterday that it has decided to shut down its service “Zomato Cashless” completely. The service was introduced in Dubai just eight month back to enable seamless in-app payment at restaurants. The reason for putting a halt to the service was due to the lack of product market fit in the current form.
Dubai was the first country to get the Zomato Cashless. Zomato had partnered with the Emirates NBD bank to bring this service.
Deepinder Goyal said,
“While our users loved the seamless experience Cashless provided at their favourite restaurants, we believe the product could be far better – for merchants and users alike – while also being commercially viable,”
He added, “In our Cashless product, we needed a user to think about the payment at a restaurant before the start of the meal, whereas they are accustomed to thinking about the payment only at the end of the meal.”
There were three reason that he stated which led to the shutdown-
- Using Cashless was not part of the natural user flow for a typical Zomato user
- It was turning out to be very hard to scale
- It was getting difficult to the company to bear the cost of the iPads and training for the restaurant workflow.
“We all know that Cashless was a great user experience, and everyone who used it was delighted with the product and the convenience of not waiting around for the bill. But it wasn’t financially viable for us to keep the business running, as the operational costs of running it exceeded the commissions the product was generating for us. Over time, no matter what we could do, the unit economics were just not going to work,” he said.
The service will be discontinued in next 7 days. Deepinder also said that they will bring Cashless back to Dubai with Zomato Base and Book – Point-of-Sale and Table Management systems, as once these are launched, the Cashless flow will become a natural part of a user’s journey on Zomato. And this will not require installation of any additional hardware at the restaurant.
Early this week, Zomato announced to lay-off 300 of its workforce. This was 10% of the total employees which currently has somewhere around 3000 employees.