Is CoD killing Electronic Payments? – Part2

Is CoD killing Electronic Payments? – Part2

India is one of the few marketplaces where e-commerce is operated more through CoD as compared to online payments. Today China’s booming e-commerce market is ruled by Alibaba’s payment wallet named Alipay and Tencent’s WeChat Payment. Even Chinese consumers are using these mechanisms to pay at offline stores for taxis and other services. Recently, Alibaba has invested in Paytm and Snapdeal in India. So, it would not be a surprise if a similar system will be introduced here. Popularity of CoD can be seen – in 15 years, China went to 30-40 percent, whereas in just 5 years, in India it became 60 percent.

CoD declined in China because mobile wallets have started offering interests. In India, too if wallets will start offering interest on the amount deposited on Wallets, then it can increase the usage of online payment as compared to COD.  He further added that shoppers that are using online payments are exponentially growing at 50-60 percent annually.

Finding the way out

Most of the experts agree that only mobile wallet can challenge the CoD in a revolutionary way. And, it makes sense too as Snapdeal bought FreeCharge; Amazon and Flipkart brought mobile wallet businesses and other uses third-party wallets. However, Paytm, sets itself apart with a COD contribution of less than 3% – thanks to its wallet. Recently, Paytm has claimed that it have lesser cancellations and returns, along-with the faster payment cycles for sellers. And, it finds no difference between metros and Tier II cities, if we talk in terms of CoD.

Local marketplace Askmebazaar has launched its own payment gateway Askmepay for the local deals, which will be combined with the geo-search. It will be used to extend the e-commerce to the offline world. According to Kiran Murthi, CEO, AskmeBazaar – “With the deliveries gone, this world will be born without COD.” He also believes that – out of total, two-thirds will be the home delivery and half of the payment will be done at the time of delivery. So, it’s expected that COD would drop to around 30-35 percent in the next couple of years.

Wrapping it Up

However, we can say that CoD may not be going anywhere, but there will be definitely a wind of change in the way shoppers spend their money. According to Neeraj of Flipkart, “The government’s vision of making India a cashless economy in the next 10-12 years may have a crucial impact on the way customers are doing transactions online.

However, that will entirely depend on the changes and steps that government will impose.” In few years, the government seems to be aware of this fact. It will have the cut off surcharges on making digital payments for any government service.

So, we can definitely say that the rise of payment banks and mobile wallets will be prove to be a game changer especially for Indian e-commerce market in the years to come. With the each passing day, mobile wallets and online transactions have become so popular that with the better infrastructure and use of right technology, user will be surely buying a cup of coffee too from a roadside shop by using online payment soon.