E-commerce Companies Temporarily Disable COD in India

After Narendra Modi announced a ban on the circulation of Rs 500 and Rs 1,000 currency notes, e-commerce conglomerates like Flipkart and Amazon India have temporarily stopped taking cash on delivery (COD). While Amazon has disabled the COD option completely, Flipkart is offering the cash on delivery option for latest smartphones, apparels, electronics or other items for purchase above Rs. 2000.

With a notion to eradicate black money from the system and as a fight against terror financing, Narendra Modi, made the legal tender of Rs 500 and Rs 1000 bank notes illegal effective midnight November 8.

The Haphazard Scenario

Post the ban of the major 500 and 1000 currencies, several e-commerce websites have either disabled COD option or are displaying a warning of non-acceptance of Rs 500 and Rs 1000 notes as payments. Many other e-commerce websites have limited the Cash on Delivery options for the time being in an attempt to avoid 500 or 1000 notes payments.

Snapdeal is displaying a reminder message as well. As per sources, business could be impacted for the time-being. It may happen that most e-commerce players will have to face interim difficulty for a period of time because numerous orders in India are still fulfilled through cash-on-delivery. Again it may become difficult as most orders comes from the smaller towns where CoD is the most preferred option.

Not just these, but several food delivery portals have also stopped the CoD mode. Customers are being urged to choose alternative debit/ credit cards or payments through wallets. Uber is allowing cash payments with a note saying that drivers will not accept Rs 500 or Rs 1000 notes as payments.

The Solution – Digital Wallet

According to estimates, cash on delivery accounts for nearly 70% of all e-commerce transactions

For Snapdeal this number stands at 50%. Therefore to cater to the audiences’ need, a digital wallet delivery system called as “Freecharge” is set to introduce for Snapdeal users. In this one simply use this service to pay for a product after it has been delivered.

Meanwhile, other digital wallet players such as Paytm, FreeCharge, Oxigen, have experience a huge boost. as people have started using the digital wallet systems to buy essential items. Paytm, has even tied up with local grocery and neighborhood stores to ease the payment option for both consumers and the retailers.

As oer sources, the COD option will soon be restarted as the government plans to reintroduce the Rs. 500 note along with new Rs. 2000 note with enhanced security features soon.

Most of the people feel that the recent announcement on discontinuing Rs. 500 and Rs. 1,000 currency notes is a positive step towards embracing the cashless economy in India. What are your views? Will this step truly free India from the clutches of Black Money? Do let us know.


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