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RBI Says Cash On Delivery Option For E-Commerce Is Not ‘Authorised’
Amazon delivery (Pradeep Gaur/Mint via Getty Images)
The Reserve Bank of India (RBI) in a reply to a query under the Right to Information (RTI) Act has said that aggregators and payment intermediaries including Flipkart and Amazon are not authorised under the Payments and Settlements Systems Act, 2007 to collect cash on behalf of third parties at the time of delivery, reports Firstpost.
Cash on Delivery (CoD) accounts for nearly half of e-commerce purchases across the country. Despite the advent of digital payments mechanisms, cash still remains the preferred mode of payment. Both Flipkart and Amazon allow customers to pay for purchases using a card on delivery using a mobile Point of Sale (m-PoS) device.
However, vendors prefer online payments as opposed to CoD due to the increased overheads involved. Under CoD, if the customer is not available during delivery or is out of cash, then the shipment must be sent back and and another delivery attempt is required which increases costs.
India’s e-commerce market is set to touch $120 billion by 2020 and the government is framing guidelines and regulating direct sales.
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