Making 'Cash on Delivery' attractive to E-Retailers
It is still early days in India for the 'Online Retailing' industry. Right now the industry is fragmented as there are many players in this space. Hence there is a stiff competition among the players. One of the ways by which E-Retailers are attracting people to buy on the net is by offering 'Cash on Delivery' (CoD) payment option. This is helping them overcome the reluctance of customers to shop on internet. This payment option tries to overcome the trust barrier which prevents customers to shop on internet.
The two main pain points in CoD are
1. Courier Agent who delivers the goods collects the money from the customer. Once they accumulate cash from multiple deliveries they have to come back and deposit the cash to the E-Retailer's a/c. There is a time gap before the payment is realized by the E-Retailer.
2. Collecting large amounts of cash also increases chances of theft.
Technology offers some solace in addressing the above pain points of CoD. E-Retailer can explore any one of the below mentioned options.
1. Mobile payment options like Airtel Money (This is based on Infosys mobile commerce platform WalletEdge) can be used to get the cash from the customer. As soon as the customer receives the goods, they can transfer the money using Airtel money on their phone to the vendor's a/c. This will ensure faster and safer mode of cash transaction. This solution has a limitation as all mobile customers may not be using Airtel services. The second solution detailed below can overcome this.
2. Convert mobile phone to Point of Sale (PoS) terminal. Companies like Square Inc (USA), Ezetap (India) offer a simple credit/ debit card reader which can connect to a mobile phone/ device and enables the phone to read debit/credit card. Once a customer receives the goods which they have ordered online, they can swipe their card in the device carried by the courier person. The payment is made instantly. As the mobile phone and debit/credit card reach in India have grown tremendously in last few years, this option is one of the convenient options available for the E-Retailers.
Both the above solutions give the E-Retailers a faster and secure way to receive the money from the customer. As our Indian E-Retailers try out new and innovative ways to make customers shop on the net perhaps very soon we will have our own Amazon!!