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E- retailers yet undecided between credit card or COD as better payment mode
Posted On: 21-05-2012 03:32:54 AM

The relatively nascent market of e-commerce retailing is as yet trying to figure out the better mode of payment between online payment via credit card or the cash-on-delivery (COD) module. The credit card usage entails a 2%-2.5% payment to the card-issuing bank, acquiring bank and the payment gateway company. In the COD model, the retailer has to deal with possible refusal by the consumer to receive the delivery, which will result in loss of nearly 2-4% as courier charge, cash-handling charges etc. The Internet penetration in India is only 8% at present resulting in reduced profits for e-retailers, which is expected to change once this increases to at least 25%. Vaitheeswaran, CEO of Indiaplaza.com, has reportedly said that nearly 95% of their transactions are by credit card, which is that despite the 2% transaction fee given to banks as the cost of doing business, the money from customer is already in their account.

 
 
 

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