E-Commerce brands not authorised to offer cash on delivery mode: RBI

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Cash on DeliveryIn a reply to a query under the Right to Information (RTI) Act, the Reserve Bank of India (RBI) said that e-commerce brands are not authorised under the Payments and Settlements Systems Act, 2007 to collect cash on behalf of third parties at the time of delivery.

As per the market reports, Cash on Delivery (CoD) accounts for nearly half of e-commerce sales across the country. The popularity of cash remains uninterrupted despite the advent of digital payments mechanisms. Many brands such as Flipkart, Amazon, Myntra, Jabong and Pepperfry allow customers to opt for card/cash on delivery mode using a mobile Point of Sale (m-PoS) device.

However, vendors find online payments more convenient and feasible as compared to CoD due to the increased overheads involved. Under CoD, if the customer is unavailable to accept the delivery or is out of cash, then the shipment should be sent back and another attempt on delivery is required which inflates the cost involved.

India’s e-commerce market is all set to touch $120 billion by 2020 and the centre is designing guidelines and regulating direct sales.

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