EMVANTAGE saving eCommerce industry from Cash Dominance

According to IAMAI, the digital commerce market grew by 33 per cent to Rs 62,967 crore last year as against Rs 47,349 crore during the corresponding period 2012. At present, there are over 2.5 crore online buyers and more than 21.3 crore Internet users in the country, according to the association.

Although online retailing is the ‘talk of the town’ today, but the thorn in the side continues to be that Cash On Delivery (COD), still accounts for 60 per cent of orders for most companies. Adding on this, RBI data says, there are 240 million debit card users in India and still COD is the preferred mode of payment. In the last few years, many eCommerce companies have been shouting foul on the potential mischief of large cash transactions by courier companies. 

 

The fight against ‘cash’

The economics of ‘cash on delivery’ as an online transaction tool does not add up, so it has been eating the bottom line for the online retailers and inhibits the growth of Payment Gateway (PG) providers in India. 

Responding to a query about competition, Vivek Sagar, Managing Director, EMVANTAGE Payments Pvt Ltd said, “Our competition is with cash! I have been fighting cash throughout my career, first as Director, Advance Payment Systems, MasterCard, South Asia, then as CEO, Ingenico International India Pvt Ltd.” EMVANTAGE is a two-year-old payment gateway solution company committed to innovation and creativity in payments technology that can reduce dominance of ‘cash’ in eCommerce industry.  

 

Commenting on this challenging issue, Sagar said, “We are running projects, wherein, the end consumer receives product at home and makes payment to the courier person who carries our mobile application that enables him to receive the payment on his mobile. Once the customer gets the product, the merchant receives the money the next day. We already have started giving this solution to retailers and the response has been phenomenal.” 

He further said, “EMVANTAGE’s Payment on Delivery Solution (PoD) is replacing COD and has reduced hassles of bringing the cash back to merchant. In the PoD transactions, the money reaches the online merchant on the next day of product delivery.” 

 

More than a Gateway 

 

EMVANTAGE is a payment company providing solution for online retailers, which besides providing payment gateway solutions to online retailers, also offers additional channels to increase revenue with the help of services like ‘Facebook Buy Buttons’, ‘QR Code’ etc. As per Sagar, EMVANTAGE has a separate team to work on the different challenges that the online merchants face in their day- to-day businesses related to online transaction and provide solutions to them. For example, they have worked out a solution, whereby, an incomplete purchase by an online shopper is immediately informed by an email to the customer so that the customer can complete transaction process without any ‘fuss’. Sagar said, “The COD segment is likely to shrink from 60 per cent to 40 per cent by 2016, despite the growing market, which is a sign of increasing customer confidence in the online payment process.” 

 

Why travel rules online retail segments

 

In the various online retail segments, apparel has been registering phenomenal growth with 66 per cent, followed by fragrances and cosmetics at 12 per cent each. Apart from these segments, health and home furnishings are few other categories, which have shown growth in the last 12 years. Striking a similar thought, Sagar said that travel, movie ticketing and bill payment segments are growing fast with online payments, since the delivery of product is definite and the customers have already demonstrated confidence through online buying process. He said, “We are happier with our conventional merchants, where the delivery of the product is definite. For example, travel as a segment has picked up very well because the customers know what they are going to receive. Similarly, movie ticket is a definite product. If the delivery of the product is doubtful, consumers don’t feel confident of placing orders.” 

With the improved delivery infrastructure in the country the retailers are able to offer quality product without damages and this has increased the sale of electronics, garments, furniture etc. Some courier companies are using advanced infrastructure and CRM to provide consignment tracking and PoD through online payment mechanism at customers doorsteps.