{"id":5493,"date":"2022-12-20T12:14:59","date_gmt":"2022-12-20T06:44:59","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=5493"},"modified":"2025-02-25T11:24:47","modified_gmt":"2025-02-25T05:54:47","slug":"what-is-cash-on-delivery","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/","title":{"rendered":"What is Cash on Delivery (CoD) and Why Is It Important for Online Businesses"},"content":{"rendered":"<blockquote class=\"modern-quote\"><p><span style=\"font-weight: 400;\"><strong>Cash on Delivery or CoD<\/strong> remains the major mode of payment for <\/span><span style=\"font-weight: 400;\">80% of online shoppers in Indian tier-2 and tier-3 cities<\/span><span style=\"font-weight: 400;\">. <\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">The growth witnessed in the e-commerce industry over the past decade has revolutionized the way business is conducted in the country. The volume of online shoppers in the country grew from <em>110 million people in 2018 to 150 million in 2020<\/em>. And, this volume is expected to grow to <\/span><a href=\"https:\/\/www.newindianexpress.com\/business\/2021\/jul\/01\/indias-e-commerce-sector-to-clock-usd-55-billion-sales-in-2021-2323865.html\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">190 million people in 2021<\/span><\/a><span style=\"font-weight: 400;\">.<br \/>\n<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Even with such an exponential increase in online shopping, it&#8217;s witnessed that customers need time to trust a particular brand and shy away from making full payment before receiving their product or service. This leads to an inclination towards choosing cash on delivery as opposed to paying digitally.<br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">In this blog, we list down the reasons why cash on delivery continues to be relevant for your online business even in the era of digital payments. Read on.\u00a0<\/span><\/p>\n<p style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/?r=blog_cta_business_banking_cash_on_delivery&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Join RazorpayX!<\/a><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d12c53ed722\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d12c53ed722\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/#What-is-Cash-on-Delivery-CoD\" >What is Cash on Delivery (CoD)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/#Why-do-customers-prefer-Cash-on-Delivery\" >Why do customers prefer Cash on Delivery?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/#Pros-of-Cash-on-Delivery\" >Pros of Cash on Delivery<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/#Cons-of-Cash-on-Delivery\" >Cons of Cash on Delivery<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/#Streamlining-CoD-refund-with-RazorpayX-Payout-Links\" >Streamlining CoD refund with RazorpayX Payout Links\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/#Over-to-you\" >Over to you<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/what-is-cash-on-delivery\/#Frequently-Asked-Questions\" >Frequently Asked Questions :<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-Cash-on-Delivery-CoD\"><\/span><b>What is Cash on Delivery (CoD)?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Cash on Delivery or CoD is a payment method where the buyer of a good or service chooses to pay in cash at the time of order fulfilment rather than paying for it in advance.\u00a0<\/span><\/p>\n<blockquote class=\"modern-quote\"><p>Cash on Delivery or CoD is a payment method where the buyer of a good or service chooses to pay in cash at the time of order fulfilment rather than paying for it in advance.\u00a0 With online shopping becoming a rage with consumers over the past few years, cash on delivery has remained one of the most preferred forms of transactions between businesses and consumers.<\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">With online shopping becoming a rage with consumers over the past few years, cash on delivery has remained one of the most preferred forms of transactions between businesses and consumers.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why-do-customers-prefer-Cash-on-Delivery\"><\/span><b>Why do customers prefer Cash on Delivery?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The digital payments revolution over the past decade has gripped the country with countless shoppers making <a href=\"https:\/\/razorpay.com\/learn\/cashless-payments\/\">cashless transactions<\/a>. However, there is still a sizable chunk of the Indian population that is sceptical about shopping and paying online.\u00a0<\/span><\/p>\n<p><em><span style=\"font-weight: 400;\">Here\u2019s why CoD is here to stay as a popular mode of payment for customers :<\/span><\/em><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><b>Limited access to the internet<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Let\u2019s face it &#8211; internet penetration is still low in our country and connectivity remains a major concern for residents in tier-2 and tier-3 cities. Increased cases of failed payments due to limited access to the internet push customers for CoD payments.<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><b>Relieves stress\u00a0<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">CoD gives a chance to customers to physically check the product out before deciding whether to pay for it or not. Therefore, cost and quality-conscious customers continue to remain keen on physical transactions through Cash on Delivery.\u00a0<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3>Familiarity with cash payments<\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Cash on delivery remains a popular payment option, especially among not-so-tech-savvy customers. Customers who are comfortable paying in cash prefer to stay in their comfort zone.\u00a0<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><b>Increased cases of fraud\u00a0<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/razorpay.com\/blog\/online-payment-fraud-and-risk-mitigation\/\">Online payment scams<\/a> have created a slight trust deficit amongst many customers. While people trust certain <\/span><a href=\"https:\/\/razorpay.com\/payment-gateway\/\"><span style=\"font-weight: 400;\">payment gateways<\/span><\/a><span style=\"font-weight: 400;\"> and websites, they are wary of sharing their account details or transaction details on the internet fearing no guarantee of sale and cyber theft.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The customer places an order for a product or service on the app or the website of the company by submitting the details about the place of delivery. Here, the customer opts for cash on delivery as the mode of payment and the order is placed.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, the company either has its own delivery agents or has a delivery partner they use to deliver its products or services to the customer. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once the product is ready to be shipped, the delivery agent collects it and delivers it to the customer and collects payment in cash. This amount is then deposited by the delivery partner into the company\u2019s account after deducting the delivery and shipping charges.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Pros-of-Cash-on-Delivery\"><\/span>Pros of Cash on Delivery<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In addition to having a range of digital payment options, it\u2019s crucial for businesses to have CoD as a payment option in operating a successful online business.<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><b>Wider outreach<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">CoD helps businesses reach out to a wider market that may be apprehensive towards online payment options. Paying cash on delivery settles the anxiety for several customers and helps businesses in converting potential tier-2 and tier-3 customers to loyal returning customers.<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><b>Multiple payment options for customers<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">While it helps businesses reach a wider audience for the goods and services of the company, CoD also displays the flexibility of the business to accept an array of payment options.<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><b>Bridges the technological gap\u00a0<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Despite digitisation and the smartphone revolution, millions of people in India still do not have access to a smartphone or internet services to enable online payments. This makes CoD the only payment option for many people in the country. Therefore, CoD helps brands enter remote demographics <\/span><span style=\"font-weight: 400;\">where internet connections and smartphones are not avidly available or used.<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><b>Builds customers\u2019 trust<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">With cyber frauds and scams on the rise, many customers voluntarily choose CoD and refrain from online financial transactions. CoD remains the only mode of payment for such customers. And letting go of such a big market segment can largely impact a business&#8217;s revenue. <\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cons-of-Cash-on-Delivery\"><\/span>Cons of Cash on Delivery<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Granted that most Indian consumers prefer CoD over an online transaction and it\u2019s a must-have for e-commerce and online businesses, handling <em><strong>CoD refunds<\/strong><\/em> can be costly and cumbersome for sellers who lack a proper refund process.<br \/>\n<\/span><\/p>\n<p><em><span style=\"font-weight: 400;\">Here\u2019s what happens when a customer returns their order and opts for a refund.<\/span><\/em><\/p>\n<p><span style=\"font-weight: 400;\">The business sends out a form or an email which the customer needs to fill out with their bank account details. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Next, these details are passed onto the team responsible for making payouts for the refunds &#8211; the team manually makes a one-off payout by uploading the account information on the bank\u2019s portal, or making a bulk payout if there is more than one refund. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">This manual, time-intensive and error-prone process of cash-on-delivery refunds takes 5 to 7 business days, making it difficult for both the business and their customer.\u00a0<\/span><b><\/b><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Streamlining-CoD-refund-with-RazorpayX-Payout-Links\"><\/span><b>Streamlining CoD refund with RazorpayX Payout Links\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: left;\"><b><br \/>\n<\/b><span style=\"font-weight: 400;\">With about 30% of online businesses experiencing returns and CoD facilitating a big chunk of online purchases, cash-on-delivery refunds are not a problem that can be overlooked. <\/span><a href=\"https:\/\/razorpay.com\/docs\/razorpayx\/payout-links\/\"><span style=\"font-weight: 400;\">RazorpayX Payout Links<\/span><\/a><span style=\"font-weight: 400;\"> streamlines and fastens the process of CoD refunds in minutes.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With <strong>Razorpay X Payout Links<\/strong>, businesses can automate the entire process of crediting the refund amount to the customer\u2019s bank account, instead of manually crediting the payment.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p style=\"text-align: left;\"><span style=\"font-weight: 400;\">All you have to do is create a Payout Link along with basic customer details like name, contact, email and the amount to be refunded.<\/span><\/p>\n<p style=\"text-align: left;\"><span style=\"font-weight: 400;\">Next, this payout link is sent to your customer where they can verify their details using an OTP, enter their bank account details and receive the refund instantly. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p><iframe title=\"Send Payout Without Account Details using RazorpayX\" width=\"770\" height=\"433\" src=\"https:\/\/www.youtube.com\/embed\/3_LGcJ0wvy4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<h2 style=\"text-align: left;\"><span class=\"ez-toc-section\" id=\"Over-to-you\"><\/span><span style=\"font-weight: 400;\">Over to you<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Let\u2019s agree that cash on delivery is here to stay and is largely popular with different demographics. So, rather than struggling and losing money on manual CoD refunds, start processing 24*7 instant, secure CoD refunds without collecting your customer&#8217;s bank account details, today!<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/?r=blog_cta_business_banking_cash_on_delivery&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Automate CoD Refunds for your Business<\/a><\/div>\n<div><\/div>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">One-stop banking solutions platforms like<\/span><a href=\"https:\/\/razorpay.com\/x\/current-accounts\/\"> <span style=\"font-weight: 400;\">RazorpayX<\/span><\/a><span style=\"font-weight: 400;\"> allow business owners to open<\/span><a href=\"https:\/\/razorpay.com\/x\/current-accounts\/?utm_source=direct&amp;utm_medium=website\"> <span style=\"font-weight: 400;\">current accounts<\/span><\/a><span style=\"font-weight: 400;\">,<\/span><a href=\"https:\/\/razorpay.com\/x\/tax-payments\/\"> <span style=\"font-weight: 400;\">pay taxes<\/span><\/a><span style=\"font-weight: 400;\">, schedule payments,<\/span><a href=\"https:\/\/razorpay.com\/x\/vendor-payments\/\"> <span style=\"font-weight: 400;\">pay vendors<\/span><\/a><span style=\"font-weight: 400;\"> seamlessly and check invoices from a single dashboard. This saves valuable time and effort.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is an accounting and banking platform that fills the gap between advanced banking solutions and finance professionals. It allows easy accounting software integration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">With<a style=\"font-size: 19px;\" href=\"https:\/\/razorpay.com\/payroll\/\"> RazorpayX Payroll<\/a><span style=\"font-weight: 400;\">, businesses can automate salary payments and provide insurance policies to their employees.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Frequently-Asked-Questions\"><\/span>Frequently Asked Questions :<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div>\t\t\t<div id=\"rank-math-rich-snippet-wrapper\" class=\"\">\n\n\t\t\t\t\n\t\t\t<\/div>\n\t\t<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Read on to understand what is cash on delivery (CoD), how does it work and why is it important to offer CoD for online businesses.<\/p>\n","protected":false},"author":151156539,"featured_media":5496,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3437],"tags":[2840],"class_list":{"0":"post-5493","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"tag-cash-on-delivery"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/5493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156539"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=5493"}],"version-history":[{"count":14,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/5493\/revisions"}],"predecessor-version":[{"id":16269,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/5493\/revisions\/16269"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/5496"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=5493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=5493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=5493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}