PayU India’s online payment solution PayUPaisa has launched a new payment option called Release On Delivery (RoD) using which customers can release the payment for the product purchased online after receiving the product.
The company states that this option has been launched with the intent of helping customers gain more trust on the merchants, while also helping merchants reduce the high transaction cost incurred through third-party Cash on Delivery (CoD) services. PayUPaisa claims that the average cost per CoD transaction borne by a merchant is as high as 8% to 10% as compared to an online transaction which costs 2% to 2.5%. Therefore CoD continues to be a challenge although it constitutes 60% of the transactions done through e-commerce sites such as Myntra and FashionAndYou. It is worth noting that most e-commerce sites except Amazon have a minimum order value to provide CoD for transactions. Flipkart has limited the transaction value of CoD in Uttar Pradesh to Rs 10,000.
How does it work? During check-out, customers are shown multiple payment options such as credit card, debit card, netbanking or CoD to choose from. On selecting CoD, RoD payment option is also offered to customers. On selecting RoD, payment can be made through credit card, debit card or netbanking. PayUPaisa releases the payment to the merchant either on receiving information from the buyer or by default after 3 days of product delivery.
It is also worth noting that eBay already has a similar feature known as PaisaPay available on its website for its buyers and sellers to transact. However, on eBay, sellers are paid only during the next payment cycle and are charged at 4.5% + applicable taxes for processing the payment.
Launched in April 2013, PayUPaisa claims to offer free hosted web stores with services like email invoicing, easy website integration and free payment gateway, among others. In July 2013, the company had waived off its transaction discount charges (TDR) for both new and existing merchants until September 30, 2013. In September 2013, it had also launched an automated all-in-one-payment solution targeting e-commerce marketplaces and aggregators that operate in different segments like travel, real estate and collect fees or payments.
In June 2013, National Payments Corporation of India had launched an e-commerce solution called ‘RuPay PaySecure’. NPCI had partnered with an US-based online payment service provider Acculynk for this initiative.
In February 2013, CCAvenue had also launched a free package for e-commerce websites that intend to use CC Avenue as their payment gateway. Few months later, it had also introduced an in-stream payment collection service for social networking websites called Social Networks In-stream Payments (SNIP).