Cash on Delivery (COD) dominates the Indian e-commerce market, accounting for a staggering 2.4L crore in value. Remarkably, the share of COD orders in India is as high as 70%. However, as businesses strive to evolve in the digital age, the necessity to seamlessly transition from cash transactions to online payments has become more pronounced than ever.
To make this transformation seamless and smooth, Razorpay emerged as a game-changer with its innovative Pay on Delivery (POD) solution. A feature that helps businesses convert cash on delivery orders into online payments with the help of QR codes and Payment links, eliminating issues of cash unavailability for customers and sparing merchants from waiting days to receive funds in their accounts.
Cash Crunch: The Operational Toll of Delayed Cash Flow and COD Returns for Merchants
Merchants require a solution for instant cash flow into their accounts and to minimize delivery failures, which lead to additional costs. Let’s explore a few of the major issues faced by merchants below:
- Detained Payment Settlements
Money can take 2 to 14 days to be credited, introducing a delay in the financial flow businesses must navigate.
- Drop in Operational Efficiency
Operational efficiency in day-to-day business activities drops by at least 6% due to considerable time spent on collecting and depositing cash. This adds complexity to routine operations.
- High Return Volumes
Cash on Delivery (COD) makes up 60% of the total return volumes. The mix of cash transactions and customer unavailability during delivery highlights the need for businesses to use a more efficient payment approach.
- Delayed Refund Process
The detailed refund process for Cash on Delivery (COD) orders takes 14% more time, causing a delay that directly affects how satisfied and trusting customers feel.
- Risk of Cash Pilferage
Cash Pilferage occurs when there is a breach in the security of the payment process often resulting in theft during delivery. Businesses need a solution to mitigate the risk of financial loss from theft or unauthorized access to cash.
Razorpay’s Pay on Delivery Solution: Digitising Cash Orders for Faster Revenue Realization
To address the above challenges, Razorpay invented a solution for businesses that enables faster access to cash inflow and eliminates logistics overheads – Pay on Delivery.
This is a solution that helps merchants digitize cash on delivery orders for faster revenue realization and reduced delivery costs by generating QR codes and Payments Links instantly.
- Incentivising Last-mile Payments
Using Pay on Delivery incentivizes customers to pay at any point during the last mile of delivery. This includes:
– In-transit Payments – The customers need not have to be physically present at the time of delivery and they can pay while their order is in transit. The customers can pay via a Payment Link sent via SMS/ WhatsApp/Email.
– Point-of-delivery Payments – The delivery agent selects the digital mode of payment and generates a QR code. Once the customer payment is successful, the delivery agent confirms the delivery.
- Instant COD via 3PL
Razorpay is the First Payment Gateway to enable businesses with 3PL (Third Party Logistics) partners to get instant access to their Cash on Delivery (COD) payments.
- Reduced Delivery Costs
This groundbreaking solution enhances profitability significantly by reducing delivery costs by 42%. It eliminates cash handling costs, loss due to theft, delivery failures due to cash unavailability while improving operational efficiency.
- Faster Refunds
Razorpay Pay on Delivery also enables 14% faster refunds by automatically capturing customer account details while processing digital payments. This instils trust in first-time customers and encourages re-purchases.
- Higher Success Rates
With features like Status Check API, Block Push Payments and Multi-Bank Support, our QR codes are built to provide best-in-class Success Rates with payment confirmations within 5 seconds.
The Future of Last Mile Delivery Payments!
In conclusion, Razorpay’s Pay on Delivery Solution is a game-changer for businesses navigating the delivery landscape. By swiftly addressing challenges like delayed payments, and operational hiccups, and ensuring customer satisfaction, Razorpay transforms how post-purchase transactions are handled. The innovative Pay on Delivery, along with the 3PL model, not only speeds up revenue but also provides a smooth and secure payment experience. Offering quick refunds, varied payment options, and significant cost savings, Razorpay has become the key to increased efficiency and profits for businesses with all kinds of delivery models.
To kickstart this transformative journey, reach out to us!
