After starting a Cashless payments system trial early this year, Zomato now decided to shut down the service for several reasons.

Just a few days ago, news surfaced that Zomato was laying off hundreds of employees in a move that signaled trouble for the company. Zomato is now in the spotlight again, this time for nixing plans to launch a Cashless payment service.

The company began trialing this Cashless payments system at the beginning of the year, starting off in the Middle East. More specifically, the trial kicked off in February 2015 in Dubai, aiming to determine whether such a system would catch on. The service enabled customers to add their credit card and pay for their food without having to deal with cash, but the trial proved the system was a failure.

Consequently, Zomato has now decided not only that it will not extend the Cashless payments system to other global markets, but it will shut it down altogether. Deepinder Goyal, the CEO of Zomato, took to the company's blog to explain the main reasons behind this decision.

According to the executive, cashless payments failed to become a "part of the natural user flow." The most difficult part was to get users to think differently. With Cashless, users had to think about paying for the meal at a restaurant before actually starting the meal, not after finishing it, as most customers are used to.

At the same time, educating restaurant staff to use Cashless was too expensive compared to the results, thus proving to be a bad investment. Zomato paid to equip restaurants with iPads so they could process payments, but realized that the cost of customer acquisition was too high.

Zomato also found that it was rather tough to scale the service beyond early adopters of tech products, so it concluded that the best decision would be to shut down Cashless altogether rather than expanding it and incurring even higher customer acquisition costs.

Looking ahead, Zomato plans to relaunch Cashless in Dubai and more markets, but only after it manages to counter the challenges it faced in the trial. For now, the company is closing Cashless completely within the next week.

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