Demonetisation: Online retailers avoid old notes by restricting CoD

CoD accounts for nearly 70 per cent of the business for the online retailers at large.

Written by Pranav Mukul , Naveed Iqbal | New Delhi | Updated: November 10, 2016 8:56 pm
narendra modi, rs 1000, rs 500, modi scraps 500, modi scraps 1000, modi rs 500 rs 1000, narendra modi black money, online shopping, rs 500 rs 1000 illegal, stop rs 500 rs 1000, paytm, paytm karo, freecharge, freecharge money, indian express news The move has got the e-commerce sector operating in the country on its feet.

The Centre’s decision to withdraw older high denomination currency notes from circulation may have made online payment services company gleeful with many customers now opting for electronic systems instead of cash payments, but the move has got the e-commerce sector operating in the country on its feet, with several of them partially or fully suspending cash-on-delivery (CoD) option. CoD accounts for nearly 70 per cent of the business for the online retailers at large.

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On the one hand there are online payments operators such as MobiKwik, which reported a 40 per cent increase in app downloads within less than 18 hours of the announcement with user traffic and merchant queries rising by 200 per cent among its over 35 million users, and Oxigen Wallet that saw an increase in the load money transactions by up to 40-45 per cent during the first half of the Wednesday. On the other there are online retail majors like Amazon India, Flipkart, Snapdeal that have made arrangements to keep themselves from getting involved with the currency notes that have ceased to be legal tenders from Wednesday.

Amazon India has suspended its CoD option offered to its customers, who place their orders from Wednesday. “We welcome the government’s move. We understand that there will be a temporary impact on customers’ day to day payment transactions,” an Amazon India spokesperson said. “Currently, we have temporarily stopped cash as a payment option for new orders. Customers that had already placed CoD orders before midnight 8/11 can pay for their orders using debit or credit cards or currency of valid denominations,” the spokesperson said, adding that the company was working on electronic alternatives for doorstep payments, and that it would soon reintroduce cash payment on delivery.

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India’s two largest online retailers Flipkart and Snapdeal have also restricted the option for their customers to pay for the orders on delivery, but only for orders below Rs 1,000 and Rs 2,000. A Snapdeal spokesperson said that the CoD limits would be increased in the coming days. Vice president of Paytm, Saurabh Vashishtha stated that the company, which is present in the e-commerce as well as online payments vertical, has also temporarily disabled CoD orders to avoid inconvenience to consumers at the time of delivery. He added that over 98 per cent of items bought on its platform are through wallet and other prepaid payment instruments.


Taxi-hailing services such as Ola and Uber, while haven’t suspended cash payment options, have issued advisories to customers and drivers to not involve the older currency notes of Rs 500 and Rs 1,000 denominations to make or accept payments.

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Ola, which operates its own e-wallet Ola Money, witnessed a surge in the wallet recharges across markets since the announcement being made. “Within the past 15 hours, we have seen a growth of over 15 times on Ola Money recharge,” said Pallav Singh, senior V-P and head of Ola Money. “In many smaller towns and cities across the country, which have predominantly been high on cash usage, there has been as much as 30 times growth. This includes cities like Nagpur, Chandigarh, Bhopal, Lucknow, Patna, Ahmedabad, Coimbatore, Jaipur, Indore etc. A majority of rides are being paid for using Ola Money as against cash across India,” Ola said.

Apart from these two major online consumer sectors, the food-tech sector has also restricted CoD options for its users. Online food ordering platforms Swiggy and Zomato have suspended cash-on-delivery options. Even as hyper-local grocery delivery company Grofers has not suspended the cash-on-delivery choice for orders placed on the platform, it is incentivising users to make electronic payments by offering online cashbacks.

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