HomeBusinessPayUPaisa Launches ‘Release on Delivery’ Payment Option For E-Commerce

PayUPaisa Launches ‘Release on Delivery’ Payment Option For E-Commerce

To mitigate the hardships of e-commerce merchants, who are facing lot of problems with Cash On Delivery (COD) option, PayUPaisa has launched its unique payment option called – Release on Delivery (ROD), which is a win-win solution for both online shoppers and merchants. To a buyer it provides the same trust as COD. While for a merchant, it’s prepaid medium to accept online payments and reduces the expenses done via COD by almost 4 times.

According to PayUPaisa, cash on delivery payment option has become a headache for e-commerce merchants because 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%). In fact such high CoD charges are eroding the margins of e-commerce firms and pose a serious question on their overdependence on CoD. The irony is that 60% of e-commerce transactions are done by accepting CoD payment option. There are other incidental expenses for doing the transactions against COD basis like cash handling fees of courier companies which is approximately 1.5% to 3.5%, and it increases further in case of returns when the end-user refuse to accept the ordered item. Added to this is the risk involved of customers tendering fake currency and  money lost by collecting courier company. 

An internal survey done by PayUPaisa revealed that more than 35% of users who do Cash on delivery, can actually pay online! Further, 75% of these users choose to do CoD because of trust factor. They want to see the product before paying. 25% of the users do it because of convenience. It’s easier than entering so many numbers present on the card.

Working of Release On Delivery ( ROD) Model of payment

When a buyer decides to purchase a product on merchant’s website and is redirected to the payments page, he’s shown multiple payment options like credit card, debit card, Netbanking or CoD to choose from.  On selecting CoD, RoD payment option is also offered to him. Buyer can select RoD payment method and pay through Credit card, Debit card or Netbanking. In turn, RoD method promises to keep buyer’s money totally safe though various safety check points and PayUPaisa’s strong dispute resolution mechanism.

Safety Checkpoint 1: Buyer’s money is kept safely with PayUPaisa and is not released to the merchant in first go.

Safety Checkpoint 2: When buyer explicitly informs PayUPaisa to release the payments, only then the money is transferred to the merchant. In case if PayUPaisa doesn’t receive any confirmation from the buyer in 3 days after the product delivery, the payments are released to the merchant by default.


Safety Checkpoint 3: In an unlikely case, where a buyer faces a problem with the delivered product, he can raise a quick dispute with PayUPaisa’s dispute resolution team. This team will resolve the dispute in an unbiased way so that the buyer does not face any financial loss. The dispute needs to be resolved in maximum 12 working days and PayUPaisa refunds back the money to the buyer if the dispute is found to be genuine.   

Merchant benefits through Release on Delivery Payment Method

ROD reduces the cost incurred through CoD by almost 4 times. RoD is prepaid mode of payment. i.e. a merchant get paid via credit/debit card or Netbanking instantly. In this case payment gateway charges are applicable to a merchant which is between 2% to 2.5%.

PayU India’s Co-founder & CEO, Nitin Gupta said “The largest pet supplier e-commerce merchant in India, Dogspot.com, went live with ROD and without any promotion, 7% of all COD transactions shifted to ROD. Large merchants like Tradus, The mobile store etc. are eager to go live on this payment option. We expect that in 9-12 months time, 20% of all CoD transactions will become Release on Delivery  transactions.” 


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