The Alternatives to Cash-On-Delivery Payments
Cash-on-delivery has been the king of payment options for years. Cash-on-delivery (COD), also called collect on delivery, is a transaction in which the seller agrees to ship the goods to the buyer's location, and the buyer agrees to pay the seller when the goods are delivered.
Cash-on-delivery has been the king of payment options for years. Cash-on-delivery (COD), also called collect on delivery, is a transaction in which the seller agrees to ship the goods to the buyer’s location, and the buyer agrees to pay the seller when the goods are delivered.
Many customers prefer cash-on-delivery when they shop online. The reason? If the consumers shop for the first time with your online store, they are in doubt if your site is legitimate. Therefore, to avoid being a victim of online fraud and losing money, they opt for the COD option.
Customers are comfortable handing in the money once they have received the correct item.
As the COD method seems beneficial for your customers, it can be a real pain in the arse for your business.
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Why is Cash-on-delivery not an effective payment option for your e-commerce business?
While your consumers enjoy the perks of having a cash-on-delivery option, many aspects of Cash-on-delivery harm your business; here are some factors.
Revenue loss
Your business is prone to loss when the customers return the product without paying for it. You spend your fair share of money to deliver the product — packaging, shipping, door-step service, etcetera. In the end, the effort was futile since the customer returned the order without paying the shipping costs.
Moreover, there’s a cost involved in returning the packages and the charge of third-party shippers.
These factors add up to the revenue loss.
Fraudulent orders
As this world is full of fools, many people will visit your website, enter the wrong details, and place an order by choosing the COD option.
As they haven’t paid for the order, it is less of a concern.
Your business approves of such orders because there is no way to authenticate customer addresses or contact details (unless you have an address API in place).
You ship the product, try to reach them for delivery, and the buyer is unavailable. Hence, your business suffers more fraudulent orders and revenue loss.
The popularity of online payments
With the world moving towards a complete digital change, consumers are widely accepting online payments. As a result, the world is slowly moving towards a cashless society.
Therefore, not many people always keep cash with them. So, when consumers choose the COD payment option, they expect to pay for the packages through e-wallets or other online payment modes.
The customer may experience inconvenience because of the unavailability of payment options upon delivery, and your customer’s convenience degrades.
Careful! They might even leave a bad review online.
Difficulty in reconciliation
Third-party delivery services are responsible for collecting the cash from the customer as soon as they receive the order. Once they collect the payment, the money is not transferred to your business immediately.
Third-party delivery services send payments over every week. Keeping track of every amount you receive from them can complicate your reconciliation process. When you do it manually, it can be tedious and time-consuming.
Detect Fraudulent orders with OmniPay Gateway
Now, no more wasting time calling your customers and confirming their orders.
OmniPay Gateway offers flexibility to reject fraudulent orders. How? As soon as the customer enters the shipping details, such as address and contact details, and the card details, 200+ fraud filters help you detect if the details provided are genuine or not.
You keep your business high-risk orders by detecting:
- Risky addresses
- Risky card usage
- Chargebacks on the card
- Risky contact details
Switch to OmniPay to:
- Reduce your revenue loss
- Reduce accounting hours
- Increase checkout efficiency
OmniPay is an alternative to COD options
How about collecting payments on COD orders online using omniPay’s QR code payments or Payment Links at the delivery time instead of cash?
Create Payment Links on the go
With OmniPay’s mobile app or desktop dashboard, you can create payment links and share them with your customers via social media platforms, SMS, emails, etc.
Create the payment links in 3 easy steps.
- Go to the dashboard, and create a payment link
- Enter customer details, such as contact number and email address
- And click Send.
And, Voila! The link is shared.
To pay, customers tap the link and enter their card details (which, by the way, get saved owing to tokenisation).
Generate a QR code
From the OmniPay dashboard, you can generate a QR code via the mobile app or on your desktop. Then, send the QR code to the customers via social, SMS, or Email.
A QR code can be scanned from a mobile device, redirecting the customer to the payment page. In the next step, the customer fills in their payment information and clicks pay. In a flash, the payment is successful.
OmniPay recently assisted many merchants in saving £76,000 yearly on their payment service bills. How about you book a call, and let’s see how much we can save your business?
