Zepto Launches In-App UPI Payments, Cuts Reliability on Third-Party Payment Apps

Quick-commerce start-up Zepto has quietly rolled out an in-app UPI payments option that lets customers complete transactions without being redirected to external payment apps, Moneycontrol reported. The feature allows users to enter and authorise UPI credentials entirely inside the Zepto app, keeping the checkout flow native to the platform. Zepto did not respond to queries about which bank or technology partner is underwriting the feature.

The in-app flow eliminates the usual hand-off to third-party UPI apps such as Google Pay or PhonePe. After a one-time setup, customers can select UPI at checkout and approve payments within Zepto itself, removing app switches, manual copy-pastes of UPI IDs or QR scanning. The internal process also gives Zepto direct visibility into transaction success and failure rates, metrics that matter for high-frequency commerce.

How the Feature Works?

Platforms bring payments in-house because small improvements in checkout speed and success rates can materially affect completed orders and unit economics. Reducing failed or abandoned payments increases gross merchandise value and conversion, especially during peak demand or promotions. Internalising payments also improves reconciliation, accelerates refunds and settlements via platform-managed balances or wallets, and reduces dependence on external apps.

Zepto now joins other delivery platforms that have moved to native payments. Swiggy implemented an in-app UPI capability using NPCI’s plug-in framework, while Zomato uses a bank-partner model to enable in-app UPI handles. The technical approaches differ, NPCI plug-ins versus bank-issued in-app handles, but the strategic intent is the same: trim friction and retain payment data inside the product.

Payment System Control Advantage

For Zepto, tighter control over payments aligns with efforts to stabilise order fulfilment, expand dark-store capacity and improve unit economics. Transaction visibility can lower disputes and reconciliation overhead, enable faster refunds and strengthen customer trust and repeat purchase rates. Over time, native payment flows may also support loyalty features, instant discounts or one-tap refunds, raising user stickiness.

Key technical and commercial details remain unclear. Zepto has not said whether it used NPCI’s plug-in, partnered with a bank for in-app UPI handles, or worked with a third-party payments provider. Fees, merchant settlement timelines and the split between wallet-mediated versus direct bank refunds are also undisclosed, factors that will determine how much value Zepto retains and how quickly sellers are paid.

Regulatory Considerations

Bringing UPI inside a marketplace changes data flows and raises operational responsibilities. Platforms must meet compliance, PCI and data-localisation requirements and coordinate with banks and NPCI on onboarding and dispute resolution. While in-app UPI reduces dependency on third-party apps, it creates tighter operational coupling between the marketplace and payment rails, requiring robust engineering and compliance controls.