Amazon and Flipkart, India's biggest e-commerce marketplaces have made the cash-on-delivery (CoD) option invalid, soon after the declaration of demonetisation of high value Indian currency notes.
The use of 500 and 1000 INR notes are made illegal to use post the declaration made by Prime Minister Narendra Modi, in order to fight corruption, black money, fake money and terrorism.
On the other hand Snapdeal, another e-commerce website has kept the CoD option, with a notice that 'Rs 500 and Rs 1,000 notes will not be acceptable'.
A message on Amazon India's website, after clicking on cash-on-delivery option, says, "We have disabled CoD for you to save cash for essential payments. Use credit/debit cards, net banking or gift cards to complete your purchase."
The move is surely to affect the business of e-commerce players in India for the next few days as a large portion of their orders are CODs.
An executive at Flipkart told TOI that this move will prove to be a significant moment for all internet-based companies.
He further added, "Of course, CoDs will go down further, in line with our broader plan to push for more online payments. This will bring more efficiency in terms of cost-per-delivery and make online payments more acceptable to newer and existing users."
As reported by ET, Sujayath Ali of online fashion company Voonik and Lenskart founder Peyush Bansal echoed the same concern: they said they were yet undecided on what to do with the products already ordered through CoD. Nearly 75-80% of Voonik's sales are CoD.
Ali told TOI, "Prepaid (or card transactions) is better unit economics, but since we have a higher (share of) CoD, this will have an impact in the short term."
Bhavish Aggarwal, cofounder & CEO of Ola, said, "As a nation, this is our first major step towards a cashless economy, bringing convenience and transparency for every Indian. This move is integral in realising our shared vision of a Digital India."