Payment with feasibility

With the e-commerce industry growing like never before in the country, the various modes of payments with regards to the same are bound to grow in the process.
online payment

Given the various modes of payments that contribute to online shopping these days, an interesting concept that has emerged is Cash Before Delivery (CBD), running parallel to the concept of Cash On Delivery. delivers this unique payment model to its valued customers.


The difference

While COD implies that the order is processed, shipped and the payment is collected on delivery, CBD is a prepaid payment method, in which an order is processed, but is shipped only upon receipt of full payment. Abhishek Shah, Founder and CEO,, says: “It offers the best of both worlds. People, who are not comfortable using credit/debit cards online, can use this facility to book/confirm their orders. The customers get free shipping and priority delivery. We also have priority customer service for prepaid customers. Besides, prepaid users get an option of redeeming discount vouchers, which is otherwise not valid on COD orders.” recently tied up with Gharpay for targeting that set of customers who are not comfortable making online payments for various reasons ranging from being uncomfortable to not being very tech savvy or other related reasons. Shah explains, “When Gharpay started, they wanted to target the segment of people who do not own credit/debit cards or who are not comfortable using it. We decided to come out with a payment option, which can be a solution to these set of users and tie up with the company like Gharpay, who are on the same page and provide similar service.”


Customer response

Shah shares that the customer response has been positive, despite the initial hiccups that arose because the customers were not aware of the process. “Currently, we get 20-25 per cent orders on CBD,” says Shah. We also spoke to Rachit Parekh, VP – Operations and Strategy, Gharpay, to better understand the deal about COD and CBD. Interestingly, Parekh points out that the problem with COD is the return rate of goods. “Today, e-commerce companies suffer high return rates on COD and they lose a lot of revenue due to this. To avoid this, some companies are willing to try out CBD. This allows them to weed out the genuine customers who choose cash payment option because they don't have a choice or are more comfortable paying with cash as against the customers who simply choose COD option because there is no upfront payment required. If the site gives an impression of trustworthiness and is a genuine website, there should be no reason why the customer will not pay using CBD.”

On eBay, India’s most popular online shopping mall, 90 per cent of the online payments are worked out through PaisaPay, while 5 per cent are made cheque and DD and the remaining 5 per cent through COD. “We accept payments via COD, credit cards, debit cards and net banking. We gain trust through our offerings like refund and replacement,” says Deepa Thomas, Head – Corporate Communications Partnerships & Pop Culture, eBay India & Philippines. PaisaPay is a safe and secure payment service owned by eBay India, which enables buyers to pay for their purchases using various modes of payment.


To sum up

Shah says that prepaid orders are a hit as they come with free shipping and other incentives from the retailer and their respective bank. With regards to CBD, Thomas says,"While what Gharpay is providing is something unique, we are not yet doing CBD. In 2005, only 15% of payments were via online payments as opposed to 90% of payments now, showing the evolution and trust in online shopping.  It is a sign of customer satisfaction and confidence.” There are customers from across 3,311 cities who are buying on eBay and 1,300 localities fall in the rural India category.

Thus, while CBD is surely a unique model and is a boon for customers and companies selling online, online payments are surely on the rise on an overall basis. It seems there is nothing stopping the e- commerce companies from penetrating their roots deep into the lives of millions of online shoppers these days.


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