Zomato has pulled out of its plans to enter the payments space as it no longer sees the venture to be commercially viable. The move comes after regulators have tightened the screws on other new entrants into the financial space.

What Happened: Zomato said on Monday its wholly owned subsidiary, Zomato Payments, has chosen to voluntarily relinquish its authorisation to function as an online payment aggregator. Zomato Payments has also retracted its application to act as an issuer of prepaid payment instruments after a board meeting.

The company has attributed this move to the changing payments landscape in India, which is largely due to the efforts of the Reserve Bank of India (RBI). The company said the payments experience has now become “seamless”.

“At Zomato, we do not see ourselves having a significant competitive advantage against the incumbents in the payments space and hence we don't foresee a business in payments space as commercially viable for us, at this stage,” the company said in a statement.

See Also: Zomato Plans To Have 1,000 Blinkit Stores By FY25, Profit Growth To Take Back Seat

The company said it became more aware of how tough it would be to gain an advantage in a space as it came closer to building the operations.

Zomato further clarified that the surrender and withdrawal will not have a material impact on the company’s revenue or operations.

Tough Regulatory Environment? This comes amid the backdrop of the troubles facing Paytm, which was slapped with significant operational restrictions on Paytm Payments Bank, starting from February 29, by the RBI. These measures included a ban on accepting new deposits and conducting credit transactions.

Read Next: MapMyIndia Shares Surge 10% As Q4 Profit Jumps 36% To ₹38 Cr