E-commerce cos struggle with COD orders, issue advisories

E-commerce cos struggle with COD orders, issue advisories
E-commerce companies are struggling to handle cash on delivery (COD) orders, following the government’s decision to demonetise Rs 500 and Rs 1,000 currency notes, with firms like Amazon and Paytm temporarily halting the facility for customers.

Some companies like Uber and BigBasket have issued advisories urging customers to pay in lower denominations, while others like Flipkart and Snapdeal have set limits to the value of orders that can be delivered through COD.

According to industry estimates, about 70 per cent of the shoppers opt for cash while buying a product.

“We have temporarily stopped cash as a payment option for new orders. Customers who had already placed COD orders before midnight 8/11 can pay for their orders using debit or credit cards or currency of valid denominations (at the point of delivery),” an Amazon India spokesperson said.

The official added that the company is working on alternatives to make doorstep payments easier for customers by introducing a variety of electronic payment options for future orders.

Flipkart and Snapdeal have capped COD orders to Rs 1,000 and Rs 2,000 respectively, and asked customers to pay using lower denomination notes.

Shopclues CBO Radhika Aggarwal said the company is accepting COD orders upto Rs 999 in government-approved denominations. In a major assault on black money, fake currency and corruption, Prime Minister Narendra Modi yesterday took the nation by surprise by announcing the demonetisation of Rs 1,000 and Rs 500 notes with effect from midnight, making these currency papers invalid.

Saurabh Vashishtha, Vice President at Paytm, said the company has also temporarily disabled COD orders to avoid inconvenience to consumers at the time of delivery.

He added that over 98 per cent of items bought on its platform are through wallet and other pre-paid payment instruments.

While customers of Flipkart will be able to pay for their orders in cash, the Bengaluru-based company has set a limit of Rs 1,000 on the same.

“We are no longer accepting COD payments in Rs 500 and Rs 1,000 currency notes. In order to enable customers to conserve smaller denomination notes for daily essential use, we are restricting COD on orders below Rs 1,000,” the spokesperson added.

They added that customers are being urged to opt for alternative payment modes like internet banking, credit and debit cards, gift cards and PhonePe wallet.

“We are also working on a slew of measures to help customers easily transition from cash to digital payments,” the spokesperson said.  Snapdeal said it will give its users the option to defer the delivery by a few days till new currency notes become easily available.

“Also, as an interim measure, we have restricted new COD orders to Rs 2,000 to make it convenient for the buyers and delivery personnel. The COD limits will get increased gradually over the next few days,” a Snapdeal spokesperson said. 

Autorickshaw aggregator Jugnoo said post the announcement, it has stopped accepting Rs 500 and Rs 1000 notes. But since over 70 per cent of its customers prefer cash payment, it has started pushing for other mode of payments to deal with the situation on hand.

According to a consumer research conducted by RedSeer, nearly 70 per cent of customers buying goods online pay through COD mode with maximum mileage coming from tier I and II cities.

Sreedhar Prasad, Partner (E-Commerce and Start-ups) said the decision to discontinue Rs 500 and Rs 1,000 notes could impact the number of new orders for e-commerce companies from tomorrow till the fresh currency is out.

He said many online customers use wallets more because of cashbacks and convenience than for not having another digital mode of payment like cards/online transfer.He added that over 30 lakh orders in the pipeline to be delivered as COD from Thursday.

“Unless an immediate ‘wallet pay on delivery’ model is devised, many of them may get cancelled, or clog the logistics network with significant delays in delivery. Many customers may still be hesitant to adopt wallets in a short span of time,” he added. 

Ola Money sees 15-fold rise in wallet recharges

Digital payment solution Ola Money, part of taxi aggregator Ola, on Wednesday reported over 1500 per cent increase in recharges across 102 cities of its operation in past 15 hours after government withdrew circulation denominations of Rs 500 and Rs 1,000 currency notes in a major move against black money and graft.

In many smaller towns and cities across the country, which have predominantly been high on cash usage, there has been as much as 30 times growth, Ola Money said.

This includes cities like Nagpur, Chandigarh, Bhopal, Lucknow, Patna, Ahmedabad, Coimbatore, Jaipur, Indore etc. A majority of rides are being paid for using Ola Money as against cash across India.

“Within the past 15 hours, we have seen a growth of over 15 times on Ola Money recharge...This move marks the beginning of a significant step towards a cashless economy and Ola Money is at the forefront of our vision of a Digital India,” Pallav Singh, SVP & Head - Ola Money said.

Ola Money is also accepted at over 500 offline and online merchants across utilities, food, entertainment, ticketing and travel, recharge, shopping etc. 

Recently, Ola Money also partnered with Mumbai Metro to help commuters recharge their prepaid metrocards and RSRTC  as their exclusive digital payment partner. Additionally, Ola Money has also partnered with merchants like, Pizza Hut, BookMyShow, IRCTC, Dominos, Cleartrip amongs several others.


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