Food and grocery delivery giant Swiggy is set to introduce a 2% collection fee on all restaurant orders to facilitate online payments from customers on the platform. The company informed several restaurants about the upcoming fee, scheduled to be implemented from December 20, marking a new policy for the platform.
In an email to some of its partner restaurants, Swiggy stated, “Effective from 20th December 2023, we will be charging a standardized 2% collection fee on all orders. This fee is for facilitating seamless customer payments on the Swiggy platform. Please note that this amount will be deducted from your payouts.”
A Swiggy spokesperson confirmed the move, stating, “Swiggy charges its restaurant partners a collection fee to facilitate smooth payments from our customers on the Swiggy platform. Swiggy incurs this charge, and passing it on is a standard industry-wide practice. This is not new, and only restaurants that do not currently have a collection fee are being charged this amount.”
This development comes approximately four to five years after Swiggy’s rival, Zomato, introduced a payment gateway fee of about 1.8% on all orders. The industry insiders suggest that such charges are standard practices, often comprising a commission plus payment gateway charges listed separately.
Swiggy’s decision aligns with its preparations for an initial public offering (IPO) anticipated between July and September next year, as reported by Reuters. Earlier in the year, both Swiggy and Zomato introduced a platform fee of Rs 2-3 per order for customers, aiming to enhance unit economics.
Last week, Swiggy appointed Anand Kripalu, Managing Director, and Global Chief Executive Officer of EPL Limited, as an independent director and chairperson of its board. This strategic move followed earlier appointments of notable individuals like Mallika Srinivasan, Shailesh Haribhakti, and Sahil Barua to its board as independent directors.
Swiggy’s financial performance has garnered attention, with Prosus, one of its significant backers, stating in its annual report that Swiggy’s food delivery business witnessed a 17% growth, delivering a gross merchandise value of $1.43 billion in the first six months of the year. The company achieved profitability for the first time in March, coinciding with a profitable quarter reported by rival Zomato.
