New Method of payment regarding E business - RoD (Release on Delivery)

PayUPaisa is set to clear the diseconomies of CoD payment model and offer a much needed relief to e-commerce merchants in India with the launch of its unique payment option called - 'Release on Delivery'.

Release on delivery (RoD) is a win-win solution for both online shoppers and merchants. To a buyer it provides the same trust as CoD. While for a merchant, it's prepaid medium to accept online payments and reduces the expenses done via CoD by almost 4 times.

Since its introduction, cash on delivery has become a love-hate relationship for any e-commerce merchant, said a release from PayUPaisa.

"They like it because it constitutes more than 60 per cent of their total transactions but they hate it because the average cost per CoD transaction borne by a merchant is as high as 8 per cent to 10 per cent (as compared to an online transaction which costs 2 per cent to 2.5 per cent)," the release added.

The report further added that around 20 per cent of CoD orders are not honored by the buyer (or returned) and considering such high rates on returns, CoD becomes unbearable for merchants.

PayU India's co-founder & CEO, Nitin Gupta said, "The largest pet supplier e-commerce merchant in India, Dogspot.com, went live with this and without any promotion, 7 per cent of all CoD transactions shifted to RoD. Large merchants like Tradus, The mobile store etc. are eager to go live on this payment option."

"We expect that in 9-12 months time, 20 per cent of all CoD transactions will become Release on Delivery transactions," added Gupta.

How does Release on Delivery Payment model work?

When a buyer decides to purchase a product on merchant's website and is redirected to the payments page, he's shown multiple payment options like credit card, debit card, Netbanking or CoD to choose from. On selecting CoD, RoD payment option is also offered to him.

Buyer can select RoD payment method and pay through Credit card, Debit card or Netbanking. In turn, RoD method promises to keep buyer's money totally safe though various safety check points and PayUPaisa's strong dispute resolution mechanism.

Praveen Kartha P

12DCP-082