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Indians’ love for cash-on-delivery continues even as e-tailers toil to change their behaviour


New Delhi, Jan 21: Indians love to pay by cash. Despite steps like demonetisation whereby people were encouraged to go more online than deal transactions with hard cash, not much change has taken effect.

Indians’ love for cash-on-delivery continues even as e-tailer toil to change their behaviour

According to a report in Quartz published on Monday, January 21, the e-commerce sector in India which is worth Rs 100,000 crore, has a big shortcoming and it is about over-reliance on cash payments or cash on delivery (COD).

India's online shoppers prefer to make 60-65 per cent of their payments through COD, as per a Livemint report , after it fell to 40-45 per cent during the demonetisation call.

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The Reserve Bank of India has also said that COD is not permissible even if it is not explicitly illegal though confusion prevails over the norms.

In India, COD continues to be widely popular because of factors like infrastructure problems, lack of trust and inadequate cycler laws.

But the e-tailers are not at all okay with COD, the Quartz report added. "Ask an entrepreneur if they want COD -- absolutely not. At the end of the day, the cash is not directly on your balance sheet. Digital payments almost immediately come to the bank account while COD may take over a week," Quartz quoted Sampad Swain, the founder and CEO of payment gateway Instamojo as saying.

Moreover, the e-tailers don't prefer COD since it involves additional costs. Factors like delivery failure, accountability, delay in returning the cash collected by the courier companies, etc. make the e-commerce firms undertake more risks and they naturally don't prefer it, Quartz cited DD Mishra, a research director at Gartner, global research and advisory firm, as saying.

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The e-tailers are thus trying to bring in a change in the shoppers' behaviour pattern and convert COD orders to prepaid with cash banks, discounts, etc. and to their satisfaction, they are seeing a rise in the non-COD modes of payments.

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