Develop a strong online payment ecosystem & incentivise it to overcome the challenge of COD, said experts @ Techcircle Payments Forum 2014

By VCC Staff

  • 14 Jul 2014

Despite e-retailing ventures growing by leaps and bounds, the e-commerce industry is facing a huge challenge in terms of meeting expectations of Indian consumers on cash on delivery (COD). The issue was taken up by a group of experts during a panel discussion on the topic ‘Roadmap for online payment growth in India’ at the recently concluded Techcircle Payments Forum 2014.

While some experts believed COD will last for some time, others were of the opinion that further discounts on online payments will push more consumers to opt for it. Many of them also opined that it is more of a safety concern for buyers, hence e-com players will have to come strong against ‘fly by night’ sort of operations.

Other interesting issues discussed also included online purchase via mobile handsets getting more importance as compared to the online purchases made though desktop and laptop computers. “On a broader level there is huge traction for people using mobile for information services and to some extend shopping. Payments are dominant currently in the PC-based world,” said Srinivasu MN (Vasu), co-founder and director, Billdesk.


The panel was moderated by Nitin Nayar, managing director, Warburg Pincus India, and saw participation from experts like Sohini Rajola, SVP and head – electronic banking at Axis Bank Ltd; Srinivasu MN; Pulak Sinha, GM- payment solutions at SBI payment services Pvt Ltd; Sridhar Iyer, director and head of digital & innovation, Citibank India; and Satyen V Kothari, chairman and founder of Citrus Payment Solutions.

Following are some of the observations made by the panellists:

Sridhar Iyer, director and head of digital & innovation, Citibank India


A lot can be done and in fact quite a bit is being done to get this COD piece to move to card payments. If we look at ticket booking for example, COD is very small and accounts for about 10 to 12 per cent. So there are quite a few factors that affect why do people prefer COD to other mode of payments. One of them is the touch and feel aspect which is very much part of the e-tailing landscape. Second is the abundance of cash among consumers.

There is a need to provide a sort of assurance to the customer that he can return the products post purchase, so it’s not like if he/she pays by card he/she is stuck with the product. Companies need to ensure that the customer policy is strong and they (customers) should be assured that they will not be saddled with something that they did not like.

Pulak Sinha, GM- payment solutions at SBI payment services Pvt Ltd


This is mainly because the ecosystem is not developed. One factor is the security part of it, if you see any technological product the first thing is obviously the awareness. In this case cash is still the king.

Sohini Rajola, SVP and head – electronic banking at Axis Bank Ltd 

The important thing here is not to use a broad brush and see where the customers are actually comfortable paying with their cards or using any other electronic form of payment. Surprisingly, within the e-commerce sector you would find that for high value purchases, customers are very comfortable using electronic transactions. For example air ticketing or insurance payments that are really large ticket size payments, there is mass adoption of electronic payments.


Customers are absolutely comfortable with that but when it comes to say ordering their groceries, they are still not comfortable. So I guess there is a trust that we have to ensure the consumers have in the party that they are paying. We had this era of fly by night operators but of late e-tailers are also becoming stronger and focused. So I think once there are established names it will be easier for consumers to trust in other mode of payments.

Satyen V Kothari, chairman and founder of Citrus Payment Solutions

It comes to the carrot and stick approach, if you want to encourage a particular behaviour then you have to promote it. We know all e-tailers typically spend more on COD and yet their prices are the same for card or COD why should that be the case? Give a user a discount on online payments and maybe he will start preferring it over COD. And this benefits both seller and the buyer. Give them (customers) an incentive in some form, it does not always have to be in monitory terms.


When Amazon launched, they did not have COD and they still do not have it for the categories that they serve. So I think it’s the confidence in the catalogue and their pricing as well as their ability to deliver. The attitude is ‘so what if the whole market (including Flipkart) gives COD on everything, we don’t need to.’ And I think they are seeing tremendous success through this confidence.

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