E-commerce giant Flipkart has started charging its customers for a partial payment for the product when the customer opts for the COD (Cash or Card On Delivery) at the time of ordering.
This has been adopted as a way to reduce returns and cancellations of orders as returning or calling of orders that have already dispatched ends up costing more for the sellers.
The Cash/Card on delivery method is the most preferred way of e-commerce transactions as it is both convenient and straightforward for users who have issues with digital payments.
As per the emails accessed by ET (1), Flipkart assured its sellers that this method of part payment would help in reducing the cancellation and return requests as the customer would have made some percentage of payment while placing the order.
The All India Vendors’ Association, a group of e-commerce sellers, stated that it was a good move on Flipkart’s part and was a first step in making the entire e-commerce market prepaid, like in the United States, Europe, and Australia.
Will it work in Tier II & Tier III?
A spokesperson from All India Vendors’ Association said, “This move can lead to a 2-3% reduction in prices for consumers as, currently, losses of such undelivered orders were factored as a cost.”
However, a large chunk of Flipkart’s customers hails from Tier II and Tier III, who have troubles with digital payments. Seeing how they react to Flipkart’s part payment option can be worrisome. As per reports, a huge section of the population still feels the friction of digital payments, largely due to the trust factor.
Flipkart was founded back in 2007 by Sachin and Binny Bansal as an exclusive book-selling platform, which was later turned into a full-fledged online store. The platform rolled out its Cash on Delivery method in 2010 to bring online shopping to the masses as online transactions were quite unpopular in India.