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Flipkart, Amazon And Other E-Sellers Won't Take Cash On Delivery

Despite initial hiccups, e-commerce business are upbeat about demonetization.

10/11/2016 1:54 PM IST | Updated 10/11/2016 3:36 PM IST
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Zubin Shroff

If you order a meal online from Swiggy or Zomato today and choose the cash-on-delivery (COD) payment option, you will receive a warning message stating that this option is not available as of now.

After the Prime Minister Narendra Modi announced the demonetization of ₹500 and ₹1,000 notes and their phased replacement by new currency notes, all e-commerce companies have stopped or restricted the cash-on-delivery option.

Food ordering services such as Zomato and Swiggy, have discontinued the option temporarily, requesting customers to pay through other means, such as credit card, debit card, net banking and online wallets.

Other e-commerce giants are following the same practice. Amazon has completely dropped the COD option for now, stating on its website: "We have disabled COD for you to save cash for essential payments."

A statement issued by the company on Wednesday, said: "We have temporarily stopped cash as a payment option for new orders. Customers that had already placed CoD orders before midnight on 8 November can pay for their orders using debit or credit cards or currency of valid denominations. For future orders, we are working on alternatives to make doorstep payments easier for customers by introducing a variety of electronic payment options. We will shortly reintroduce cash payment on delivery."

Amazon

Meanwhile, Flipkart is limiting the COD option to orders worth ₹1,000 or less, with the money to be paid in denominations other than the discontinued ₹500 and ₹1,000 notes.

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Another e-commerce giant, Snapdeal, has limited COD option to ₹2,000. It is also offering customers a 10 percent discount on using any credit or debit card. Additionally, its subsidiary e-wallet company, Freecharge, has launched a wallet-on-delivery option where you can pay through the e-wallet on delivery via a PIN number. The company might also defer some of the current deliveries in view of the prevailing cash crunch.

Radhika Aggarwal, co-founder and chief business officer at the e-commerce site, Shopclues, admitted that business will slow down over the next few days. "There will be temporary disruption and by that I mean we have already seen a dip in traffic today," she said. "A couple of days from now will be slow for commerce across the nation because people will conserve cash. This will not have a very significant impact on us because about 25-30% of the orders are cash on delivery."

Online grocery shops such as Big Basket and Grofers are readily accepting cash but only in denominations besides the now defunct ₹500 and ₹1,000 notes.

The first phase of the new currency roll-out was expected to cause hiccups, more so in e-commerce business. A report in the Economic Times suggests that 2 million shipments are currently stuck in the wake of the demonetization.

It is estimated that the payment mode for almost 70 percent of the orders handled on e-commerce websites was through COD.

On the other hand, NASSCOM, the trade association representing IT and BPO industries, has welcomed the demonetization, stating that it will provide a boost to the e-commerce industry.

"This is also a welcome move for the e-commerce industry, where a large number of deliveries in India are CoD or cash on delivery, raising logistics costs and risks," the statement read. "While other reasons for use of cash, such as trust, may take longer to alleviate, the present announcement could mitigate a significant factor driving CoD, the availability of unaccounted cash."

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