Cash on Delivery (COD)
Category: payment
Payment collected from the buyer at the time of delivery, common in certain e-commerce markets.
Cash on Delivery (COD) is a payment method where the buyer pays for goods at the time of delivery rather than in advance. COD is popular in markets with low credit card penetration or where buyers distrust online payment, including India, Southeast Asia, the Middle East, and parts of Latin America. COD increases seller risk due to potential delivery refusals and higher return rates.
Examples
- • COD is the preferred payment method for e-commerce in India, with approximately 60-70% of online orders paid on delivery.
- • Sellers offering COD on platforms like Lazada or Shopee face higher return rates (15-30%) compared to pre-paid orders (5-10%).
- • COD requires the delivery company to collect cash and remit to the seller, adding complexity and potential delays in receiving payment.