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Indian e-tailers Flipkart, Amazon temporarily restrict Cash on Delivery(CoD) payment option

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Indian e-commerce companies, including Amazon, Flipkart, and Snapdeal have today curtailed the most used payment alternative – cash on delivery, in wake of the scintillating move from PM Modi to eliminate existing Rs. 500 and Rs. 1,000 notes from circulation.

While Amazon has completely disabled the cash on delivery(CoD) payment feature on its platform, its arch-rival Flipkart has moved ahead with the decision to restrict the option for orders above Rs. 2,000. The Indian e-commerce giant, Flipkart, also mentions on its website that it won’t accept Rs. 500 and Rs. 1,000 notes as payment and urged the customers to arrange alternative payment methods.

In addition, other smaller(but comparable) online marketplaces and food delivery startups have also stopped accepting payment via the cash on delivery option. The customers are instead being pushed to go cashless and pay using debit/credit cards or digital wallets. Grocery delivery services like BigBasket instead of putting a temporary ban on CoD, have started raising a debit note for their customers which can be paid later by them to ensure a hassle free experience.

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This initiative taken by digital businesses can be seen a significant step towards supporting the move. In the short run, this is expected to impact the business of e-commerce retailers whose major purchases still happen through the cash on delivery mode. The Indian populous is still pretty apprehensive of using plastic cards and digital wallets for online payments. Thus, cash payments still account for a significant 60-70 percent of the sales.

This move of not accepting(or restricting) cash on delivery orders shows that the digital businesses operating in the country are in favor of the government’s decision. The operations are expected to pursue smoothly, with the cash payment option restored, once the government reintroduces the new Rs. 500 and Rs. 2,000 notes with enhanced security features to the public. The new currency will take some time to come to become ubiquitous across the country.

Meanwhile, the online payment wallets such as Paytm, FreeCharge or  are extremely satisfied and see this move from the government as their triumphant victory. Post Narendra Modi’s announcement, Paytm has issued a statement with initial rampant growth figures. It notes that the payment platform saw an overwhelming 435 percent increase in overall traffic, coupled with 200 percent hike in number of app downloads and 250 percent surge in the number of overall transactions and transaction value.

In a statement received by The Tech Portal, Mr. Amit Bhor, co-founder and CEO at Walnut also comments on the decision of demonetising higher currency notes:

This is a big move to curb black money and fake currency. This is also a great step in the direction of going “less-cash” but we need to see how the re-introduction of higher denomination notes and ATM usage limits are managed. But this jolt will definitely change user behaviour which will lead to higher usage of banks, cards, digital tracking and payments.

A hands-on guy fascinated by new apps, technologies and enterprise products.

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