{"id":5086,"date":"2021-07-28T15:52:31","date_gmt":"2021-07-28T10:22:31","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=5086"},"modified":"2024-12-17T07:15:54","modified_gmt":"2024-12-17T01:45:54","slug":"what-is-cash-on-delivery-how-can-it-increase-your-business","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/what-is-cash-on-delivery-how-can-it-increase-your-business\/","title":{"rendered":"What is Cash on Delivery? How Can it Increase Your Business?"},"content":{"rendered":"

The e-commerce industry is growing tremendously, and new companies are entering this market day by day. As per<\/span> India Brand Equity Foundation (IBEF)<\/span><\/a>, Indian e-commerce will reach US $99 billion by 2024, growing at a 27% CAGR over 2019-24.\u00a0<\/span><\/p>\n

There has been a significant rise in online shopping amid the pandemic. From day-to-day groceries to large electronic items, everyone is purchasing online and avoiding stepping into physical stores.<\/span><\/p>\n

However, with online shopping, there comes a host of insecurities \u2013 not being able to instantly receive the product, online frauds, unencrypted data, fake apps, unsecured Wi-Fi, to list a few. That is why e-commerce companies and digital businesses are promoting Cash on Delivery along with other payment methods.<\/span><\/p>\n

What is Cash on Delivery (CoD)?<\/span><\/h2>\n

Cash on delivery is a payment method offered during online shopping. Through this payment method, the buyer has to make the payment on delivery and not in advance. It sets you free from hassled transactions.\u00a0<\/span><\/p>\n

Shopping remains fun, and you can still use this payment method even if you don\u2019t have a bank account. Placing an order online and not paying for it until you receive the product helps in reducing customer anxiety.<\/span><\/p>\n

However, it doesn\u2019t always mean making payment using cash, you can use other forms of payment \u2013 credit\/debit cards, QR codes, or make an electronic payment<\/a>.<\/span><\/p>\n

How can Cash on Delivery help in growing your business?<\/span><\/h2>\n

Let\u2019s have a look at the multiple advantages offered by cash on delivery to businesses:<\/span><\/p>\n

Boost Customer Loyalty<\/span><\/h3>\n

Offering the cash-on-delivery payment option increases the likelihood of people completing their orders. Since you are not asking for an upfront payment<\/a> and the customer gets to check out and feel the product, it builds trust for your brand.\u00a0<\/span><\/p>\n

Customers get an assurance that your brand is more focused on fulfilling its orders and not just on receiving payments. It boosts customer loyalty which can eventually result in them paying online for their purchases.<\/span><\/p>\n

Increased customer reach<\/span><\/h3>\n

Cash on delivery is considered a safe payment option and is a popular choice among customers. If you offer this payment method to your target customers, you are much more likely to appeal to a broader set of audience.<\/span><\/p>\n

Increase order completion rates<\/span><\/h3>\n

If you go through your web analytics dashboard, you will notice that often people visit your website, add the product(s) to their cart and then abandon the order before completing the purchase. This happens because people are not ready to spend their money at that instant.\u00a0<\/span><\/p>\n

With the cash-on-delivery option in place, you can fight cart abandonment<\/a> issues and offer an increased sense of trust to your customer. It is a common customer mindset. Furthermore, the customer doesn\u2019t have to pay right away. Hence, they\u2019re more likely to push through with an order.<\/span><\/p>\n

Increase in impulse purchases<\/span><\/h3>\n

These days, customers are always on the go. They want to do everything quickly. They want to browse products and complete their payments hastily. <\/span>According to Statista,<\/span><\/a> 21% of survey respondents admitted to abandoning a shopping cart owing to the long checkout process.<\/span><\/p>\n

When it comes to digital payment methods, two-three more steps get added to the entire checkout process. However, with cash on delivery<\/span>,<\/b> the entire buying process can be completed within seconds. As a result, this can increase impulse purchases at the customer\u2019s end.<\/span><\/p>\n

Word-of-mouth advertising<\/span><\/h3>\n

Happy and satisfied customers are the best brand advocates. The likelihood of such customers sweet-talking your brand in front of their friends and family is quite high. With the benefit of cash on delivery, you can turn your customers into your brand advocates and reduce acquisition costs.<\/span> According to Forbes,<\/span><\/a> loyal customers are five times more likely to purchase again and four times more likely to refer a friend to the brand.\u00a0\u00a0<\/span><\/p>\n

Attract potential buyers<\/span><\/h3>\n

Offering cash on delivery services helps you attract potential buyers. It is not easy to trust new websites and apps, but when buyers get the option to pay on delivery, it reduces the risk and increases comfort. This is an excellent way to lure new customers.<\/span><\/p>\n

Why is it important for businesses to offer Cash on Delivery?<\/span><\/h2>\n

As per Nielsen\u2019s Global Connected Commerce Survey,<\/span> published on Business Insider,<\/span><\/a> around 83% of Indian customers prefer Cash on Delivery over other payment methods while shopping online. 72% of customers from major cities and 90% of customers from small towns pick cash on delivery over other digital payment modes.<\/span><\/p>\n

\u00a0Primary reasons for the popularity of the CoD<\/span> option among consumers:<\/span><\/p>\n