The majority of us who engage in online commerce and shopping are probably pretty familiar with the term cash on delivery, or COD. In layman's terms, it is a method of payment in which the client pays the courier or vendor directly with cash or a credit card immediately after receiving the product. One of the most common methods of transaction in online buying and selling is thought to be this one.
In almost every country where e-commerce has thrived, COD has established itself as the go-to method of payment. Some of the nations included in them are Thailand, Bangladesh, India, and so forth. Why is this kind of payment so widely accepted, and is it risk-free? Let's talk about this.
Around 83 percent of Indian consumers favoured using cash on delivery as a payment method for online purchases, according to Nielsen's Global Connected Commerce Survey (Business Insider). Due to a variety of factors, cash on delivery has become the most popular form of payment throughout India. First off, India's tier-2 and tier-3 cities lack the infrastructure and knowledge necessary for accepting internet payments. Second, the majority of people lack the bank accounts and devices necessary for online banking.
It goes without saying that cash on delivery will have some advantages and disadvantages, just like all other payment methods. You will be more successful as a buyer or seller in an online store if you are aware of these.
Advantages of cash on delivery
There are a lot of advantages to the customers/buyers when it comes to COD (Cash on delivery)
Availability of payment choices for the buyer
One of the biggest advantages of COD for the customer is that you can only make a payment once you have the merchandise in your possession. This eliminates the possibility of financial loss. Your hard-earned money is left with the seller, for instance, if you pay in advance online and the seller does not deliver. When it comes to cash on delivery payments, there is no such danger there.
Before making a purchase, the consumer can inspect the product to ensure that everything is in working order. You can always return a product for a refund if you discover a flaw in it or receive a different result than expected.
No reliance on credit or debit cards
The fact that cash on delivery is independent of credit or debit cards is another important benefit. In suburban or rural locations where many people do not utilize cards, this aspect is helpful. When the delivery arrives, you inspect the item and finish the transaction by making payment. It is easy to use and convenient.
Safe from online payment fraud
In the case of cash on delivery, security can be preserved. You are not required to give the vendor any financial details, such as debit card, credit card, or bank account information. This is one of the main causes for which many clients select COD as their preferred method of payment.
Problems with Cash on Delivery (COD)
In an online business, cash on delivery is somewhat more important to the sellers than it is to the customers. You must therefore choose when to provide this service to your clients.
Exposure to Losses
Cash on delivery has many drawbacks, one of which is that it leaves the seller open to losses if the client returns the item without paying for it. Even though you spent all the money on the product, it was ultimately replaced. This increases the revenue you lose.
When it comes to cash on delivery, there have been fraudulent operations in the past. The likelihood of fraud increases since the customer information that is currently available lacks legitimacy.
When you choose the cash on delivery payment option, courier providers charge you a fee. The majority of sellers quickly experience the impact of these charges because it can be difficult to pass these costs to your customers.
What else if not COD?
Sellers should attempt to take certain procedures in order to lessen the drawbacks and dangers associated with COD. For instance, many retailers today add on additional delivery fees when customers choose COD. Even if they are using cash on delivery, retailers still need to collect crucial client data including contact information. The likelihood of losses and frauds can be greatly reduced in this way.
The solution to all the CoD problems:
A "Release on Delivery" (ROD) payment service is an alternative to "cash on delivery," as it protects the interests of the merchant and safeguards the rights of the customer.
How does it work? - As part of this system, buyers can choose the RoD payment method and make payments using credit cards, debit cards, or net banking. In turn, the RoD method ensures that the money of the buyer will be totally safe in an escrow account. In this way, the seller becomes confident that the buyer will pay. Only after the buyer gives instruction to the escrow company to release the money upon delivery of the product is the payment released. There is also a dispute resolution team that deals with all product and delivery issues.
It appears that this is a great service that not only protects buyers, but also makes it easy for merchants to convert those who choose cash on delivery due to trust issues to try out online payments safely.
Although Cash on Delivery is great for buyers, it can be problematic for e-commerce businesses and can add to their workload and reduce their profit margins. A "Release on Delivery" (ROD) payment service is an alternative to "cash on delivery," as it protects the interests of the merchant and safeguards the rights of the customer. The RoD method ensures that the money of the buyer will be totally safe in an escrow account. In this way, the seller also becomes confident that the buyer will pay. Only after the buyer specifically orders the escrow company to release the money upon delivery of the product is the payment released.
Digital Escrow Service In India.
Digital escrow services are offered by many companies in India. Among the most trusted is Vouch.
Vouch’s Digital Escrow service is a transparent way for buyers and sellers to build trust and secure a clean transfer of product and payment. Sellers can feel assured that they will be fairly compensated promptly, and buyers will feel confident that their order will be delivered as expected and on schedule. Vouch Digital Escrow keeps you updated and informed at every step of the transaction process till the end. Vouch’s professionals are always available to assist you with all queries that you may have during the entire transaction process.
There is no scope for deceit or fraud since the payments, shipping, delivery, and execution are carried out under the honest and watchful eyes of the Vouch’s professionals. With Vouch, any business transaction becomes transparent, uncomplicated, and hassle-free.
Check back here to learn more about Escrow and how to protect yourself from fraud.
Safety is not just about protecting your credit, debit card number, and UPI accounts. It's about having control of your money till you've received the product or service you bought online!
As you're now aware of the importance of online safety, let's get your transactions secure on Vouch. It's just a click away.