In recent years, e-commerce has grown to become one of the largest businesses for retail and is expected to continue to grow at an unprecedented rate. Purchasing products online is convenient and what makes it even better is when online stores are not only able to offer a diverse selection of products, but payment options as well!
A large portion of the population in Southeast Asia does not have access to credit cards or internet banking services. By enabling cash on delivery, online businesses are gaining access to over 73% of the region’s unbanked population. In 2017, cash on delivery (COD) accounted for 47% of payments for online shopping in the Philippines, 42.8% in Vietnam, and 20.6% in Indonesia — making COD one of the most popular payment options.
DHL now offers a cash on delivery service, which allows consumers to pay for international online purchases with cash, mostly for sellers based in China and Australia that deliver to consumers in Malaysia, Thailand and Vietnam. Online stores such as Zalora, a popular e-retailer and fashion destination in several Southeast Asian countries, is proud of its fuss-free shopping that offers a variety of payment methods — including paying in cash upon arrival at your doorstep.
Cash can be an unappealing form of payment for e-commerce merchants since it is impossible for cash to be exchanged when customers place orders online. But with this payment-on-delivery system, businesses can now reach out to an untapped market of consumers.
While COD is beneficial and has a positive impact on cash circulation, payment upon delivery can sometimes be a complicated affair as the consumer must be physically present – and usually with the exact change. But the benefits overshadow perceived inconveniences as businesses can now expand their customer base, the unbanked can shop online and consumers who fear fraudulent transactions can shop carefree.
COD reminds us that despite the digital world we live in, there are always new ways to innovate cash to ensure that no one gets left behind.