Cash on Delivery (COD) – Payments on Delivery (POD) - Deposit and Payouts

India’s ecommerce sector is surging, thanks to an increasingly internet-savvy population and cheaper smartphones. India is very different from the rest of the world’s market since ecommerce in India remains heavily dependent on the pay cash-on-delivery mode of payment — more than 50% to 65% percent of transactions by ecommerce are conducted via this method.

Paying cash on delivery is the process where deposits are made by clients paying for a product or service in person when the product or service is delivered. If the COD/POD buyer fails to make the payment, the product is returned to the seller or the service is not initiated. So with Cash on Delivery/Payments on Delivery the recipient (the customer) makes payment for the order at the time of delivery rather than in advance.

In India, the system was designed to attract consumers who didn’t have access to digital payment systems such as online banking and/or credit cards. Cash on delivery/Payments on delivery has facilitated much of the growth of Indian ecommerce. For the next 5 to 10 years it will be still be the payment method of choice in India, especially where larger amounts need to be paid, deposited or paid out/withdrawn. The solution RupeePayments offers is via a server to server API and allows an ecommerce merchant to offer COD/POD as a checkout method on their cashier.

Why cash on delivery works in India:-  

There are two main reasons why people still prefer COD/POD payment options. They are:

  • Not having access to digital payment method
  • Wanting to pay large sums of money but not via their banks

How does payment on delivery or cash on delivery work?

  1. Client places a deposit order on a website and requests delivery at a given address. The customer does not make payment while ordering the item and chooses pay on delivery/cash on delivery as their payment method.
  2. Once the order is placed, a unique voucher number is raised which in effect acts as an invoice.
  3. The central controller contacts the client to confirm they will meet them in approximately 15-30 mins
  4. The driver goes to meet the client with both knowing the unique voucher number and goes to the address provided by the customer.
  5. The customer makes the payment to the driver in cash once they have matched voucher numbers.
  6. The COD/POD amount is then deposited to the account of the client’s ecommerce site and the driver waits with the client until the deposited amount shows on their ecommerce account.

How does this work for you?

At RupeePayments, we provide you with multiple city access and our fully trained secure delivery executive will on delivery take a cash payment which will be credited to the client’s account instantly.

Generally, the driver will make three attempts to contact the client. If even after the third attempt, contact cannot be made then the deposit is failed.

Offering COD/POD payment options gives Indian consumer increased confidence in your brand whilst reducing debit/credit card fraud, buyer identity fraud and chargebacks.

Why is COD/POD popular in India?

Cash on delivery option is boosting e-commerce in India. It is also popular among young customers who do not have credit cards and other means for paying for goods and also for high net worth VIP individuals who do not wish to use a bank.

Conclusion for COD or POD

Pay on Delivery or Cash on Delivery is critical as a mode of payment for your customers. As a merchant in the West it may seem strange as a payment method, however, you have nothing to worry about regarding COD/POD. To really penetrate the Indian marketplace successfully and especially if you are targeting High Net Worth (HNW) and VIP clients, you will quickly realise that COD/POD drives more traffic to your website than any other method and also gives your customers a sense of security. Merchants need to offer this in their payment portfolio partnering with RupeePayments to gain their competitive advantage.