{"id":3705,"date":"2020-08-26T07:01:27","date_gmt":"2020-08-26T07:01:27","guid":{"rendered":"https:\/\/razorpay.com\/newsroom\/?p=3705"},"modified":"2022-08-17T18:30:05","modified_gmt":"2022-08-17T18:30:05","slug":"demand-for-cash-payments-back-to-pre-lockdown-levels-65-customers-still-pay-via-cash-e-commerce-businesses-face-30-loss-due-to-cancellations-returns","status":"publish","type":"post","link":"https:\/\/razorpay.com\/newsroom\/demand-for-cash-payments-back-to-pre-lockdown-levels-65-customers-still-pay-via-cash-e-commerce-businesses-face-30-loss-due-to-cancellations-returns\/","title":{"rendered":"Demand for Cash Payments Back to Pre-Lockdown Levels &#8211; 65% Customers Still Pay via Cash, E-commerce Businesses Face 30% Loss due to Cancellations &#038; Returns"},"content":{"rendered":"<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">Delhi has 72.4% of customers who prefer cash payments; followed by Hyderabad with 68.3% and Mumbai with 58.5% Cash on Delivery (CoD) rate<\/span><\/i><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">SME E-commerce sellers see over 30% loss due to cancellations and returns on CoD orders\u00a0<\/span><\/i><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">PrePay CoD, the newest addition to Thirdwatch Apps helps e-commerce SMEs share a payment link in advance for the risky CoD orders<\/span><\/i><\/li>\n<\/ul>\n<p><b>Bangalore &#8211; 26 August, 2020: <\/b><span style=\"font-weight: 400;\">Covid-19 has certainly changed the economy in ways that we hadn\u2019t predicted. Just like every industry, the <\/span><b>Indian e-commerce has experienced a whirlwind of change, with businesses innovating for \u2018the now\u2019<\/b><span style=\"font-weight: 400;\">. One of the biggest characteristics of the Indian market has been its affinity for <\/span><b>Cash on Delivery (CoD)<\/b><span style=\"font-weight: 400;\">. E-commerce players are now witnessing strong demand for non-essential items as compared to the first two phases of the lockdown which were limited to purchasing only essential items like grocery, healthcare and pharmaceutical products.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">While digital payments are rapidly picking up, CoD still remains to be the preferred mode for customers shopping online. For an online store, offering CoD helps increase sales manifold. But, offering CoD comes with its own set of problems too. <\/span><b>Customers usually place orders impulsively, and this leads to a high amount of cancellations<\/b><span style=\"font-weight: 400;\"> leaving the seller going through the painstaking process of shipping the order back and forth, resulting in over 30% Return to Origin (RTO) losses, a significant cost for e-commerce players.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/razorpay.com\/thirdwatch\/\"><b>Razorpay Thirdwatch<\/b><\/a><b> is India\u2019s first solution to reduce RTO orders <\/b><span style=\"font-weight: 400;\">(which doubles up as CoD losses)<\/span><b>. <\/b><span style=\"font-weight: 400;\">The product empowers the sellers from being charged for risky orders by providing them with a unique offering which identifies and filters out only the risky CoD orders so that online sellers can review them and make informed decisions.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A lot of us believed that COVID-19 would be the end of the cash market, however, the Indian shopper preferences surprised us once again. Here are <\/span><b>some interesting insights about the CoD behaviour of SME e-commerce sellers, <\/b><span style=\"font-weight: 400;\">based on transactions held on the <\/span><b>Razorpay Thirdwatch<\/b><span style=\"font-weight: 400;\"> platform:\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Current cash preference in India is almost back to the pre-pandemic levels with close to<\/span><b> 65 percent of customers still preferring to pay via cash<\/b><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">While tier-1 cities like Mumbai, Delhi, Bangalore &amp; others. have a significant uptick in prepaid orders, the vast majority <\/span><b>(80%) of shoppers in tier-2 and 3 cities still prefer to pay via cash<\/b><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Guwahati has the highest share of 86.7%, followed by Ranchi at 84.5% and Lucknow at 78.9%<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Among tier-1 cities, Delhi has 72.4% of customers who prefer cash payments; also the <\/span><b>only metropolitan city to have &gt;70% CoD rate<\/b><span style=\"font-weight: 400;\"> followed by Hyderabad has 68.3% and Mumbai has 58.5%<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\"><b>Many states are also seeing higher adoption rates for e-commerce<\/b><span style=\"font-weight: 400;\"> majorly due to the fact that Cash on Delivery is offered. Particularly, customers from states in the North Eastern India prefer COD &#8211; Manipur 89.6%, Sikkim 88.3%, Assam 87.4%\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">During the lockdown, a lot of businesses, especially the ones that sold essential goods, moved towards online. And <\/span><b>since May, 2020: 65% of orders were placed via CoD and 35% via digital channels<\/b><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Thirdwatch spoke with its customers and learnt that on an average, cash handling charges can range any<\/span><span style=\"font-weight: 400;\">where between INR 20 to 50 per order. The cos<\/span><span style=\"font-weight: 400;\">t rises even further in case of returns as marketplaces\/logistic companies deduct courier fees.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><b>With Thirdwatch\u2019s latest PrePay CoD option, the product now allows its customers to <a href=\"https:\/\/razorpay.com\/payment-links\/\">send payment links<\/a> for the high-risk CoD orders and convert them to prepaid orders. PrePay CoD helps boost delivery rates, increase revenue and reduce RTO.\u00a0<\/b><\/p>\n<p>&nbsp;<\/p>\n<p><b>Harshil Mathur, CEO and Co-Founder, Razorpay<\/b><span style=\"font-weight: 400;\"> s<\/span><span style=\"font-weight: 400;\">aid,<\/span><i><span style=\"font-weight: 400;\"> \u201c<\/span><\/i><i><span style=\"font-weight: 400;\">Cash on Delivery has experienced a lot of ups and downs over the years and the past 6 months have been a rollercoaster for everyone. The good news is that the e-commerce industry is already on its way to a fast-paced recovery! The question we all have is, \u2018will cash continue to be the king?\u2019 Because the supply chain was severely hit after the pandemic, deliveries are taking longer than usual, and online shoppers prefer CoD so that their money is not locked for the entire duration in uncertainty. However, from an e-commerce company\u2019s perspective, CoD purchases come with a certain level of risk &#8211; the losses arising from order cancellations and RTO. With offerings like the PrePay CoD, we want to minimise the losses for these businesses while also ensuring that the customer trust is not compromised. At Razorpay Thirdwatch, we want to continue to enable all e-commerce businesses to slowly recover from the impact of this pandemic.\u201d\u00a0<\/span><\/i><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/razorpay.com\/thirdwatch\/\"><span style=\"font-weight: 400;\">About Razorpay Thirdwatch<\/span><\/a><span style=\"font-weight: 400;\">:<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Razorpay Thirdwatch is the first-of-its-kind, AI-powered solution tailored to detect fraudulent and risky orders that signal a high probability of losses due to RTO (Return To Origin). Built for the Indian e-commerce market, Thirdwatch was acquired by Razorpay in August 2019 with the vision to help boost overall profitability for e-commerce businesses. Businesses in India face heavy losses due to order cancellations, Return to Origin (RTO) and fraudulent orders. Powered by Machine Learning algorithms like detecting incomplete addresses with the Address Deliverability model, user behaviour and device fingerprinting, Thirdwatch empowers e-commerce businesses to make smarter shipping decisions. Trusted by 500+ ecommerce brands, Thirdwatch has boosted success rates of order deliveries\u00a0 and in a short time, proved to be the go-to brand for tackling RTO and fraud related issues.<\/span><\/i><\/p>\n<p>&nbsp;<\/p>\n<p><b>For more information, please contact:<\/b><b>\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Hepsibah Rozario ||<\/span> <a href=\"mailto:hepsibah.rozario@razorpay.com\"><span style=\"font-weight: 400;\">hepsibah.rozario@razorpay.com<\/span><\/a><span style=\"font-weight: 400;\"> || +91 8884913468<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Shalini Chandrasekharan || <\/span><a href=\"mailto:shalini.chandrasekharan@razorpay.com\"><span style=\"font-weight: 400;\">shalini.chandrasekharan@razorpay.com<\/span><\/a><span style=\"font-weight: 400;\"> || + 91 7829212112<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Aafia Feroze ||<\/span> <a href=\"mailto:aafia.feroze@adfactorspr.com\"><span style=\"font-weight: 400;\">aafia.feroze@adfactorspr.com<\/span><\/a><span style=\"font-weight: 400;\"> || +91 9902491526<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Delhi has 72.4% of customers who prefer cash payments; followed by Hyderabad with 68.3% and Mumbai with 58.5% Cash on Delivery (CoD) rate SME E-commerce sellers see over 30% loss due to cancellations and returns on CoD orders\u00a0 PrePay CoD, the newest addition to Thirdwatch Apps helps e-commerce SMEs share a payment link in advance<\/p>\n","protected":false},"author":3,"featured_media":4082,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[27],"tags":[],"class_list":{"0":"post-3705","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-corporate"},"modified_by":"Giri Sandeep","_links":{"self":[{"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/posts\/3705","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/comments?post=3705"}],"version-history":[{"count":3,"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/posts\/3705\/revisions"}],"predecessor-version":[{"id":4083,"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/posts\/3705\/revisions\/4083"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/media\/4082"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/media?parent=3705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/categories?post=3705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/newsroom\/wp-json\/wp\/v2\/tags?post=3705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}