Amazon, Flipkart and others halt Cash on Delivery

It’s not just the currency notes of Rs 500 and Rs 1000 are out from the Indian market, the whole idea of cash has taken a hit. And with it, the concept of Cash on Delivery (CoD), at least temporarily. A day after Indian government scrapped the two big currency notes, Amazon and a few other e-commerce websites have temporarily stopped taking orders on the basis of CoD. Flipkart too has temporarily halted the CoD on orders with value of more than Rs 999.

The CoD is a popular method of payment in India for online shopping because it takes away the element of some uncertainty that Indian shoppers still prefer. So it is possible that removal of Rs 500 and Rs 1000 currency notes will affect e-commerce slightly as people adjust to the new ground realities. However, the chances are that the CoD will make a comeback once the new Rs 500 and Rs 2000 notes reach people.

Although popular with shoppers, the CoD is also something of a bane for the e-commerce industry. The websites like Flipkart and Amazon hate it because it often results in high rate of returns. People order goods without paying any thing for it, change their mind and refuse to take the delivery. It is also inefficient because for each CoD they have to spend extra time in processing the whole financial transaction. But the mode is so popular, because of its assurance that you don’t have to pay until you see the product, that all major e-commerce websites use it to sell goods.

Although in the long run, the Indian government’s note recall is likely to benefit e-commerce in India. All major websites are trying to push and promote online payments. Now with the almost 85 per cent of total cash in India taken out of the circulation, the online payments, especially for larger orders, may see a faster growth in the country.


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