The web’s trust deficit: Why Indians prefer cash for online purchases

India has been surging high if we speak about the shopping experience at various e-commerce websites, and we can only be thankful to the growing use of smartphone and internet in our country, marking us the second-highest online shopper followed by China. However, if we speak of mode of payment trends in e-commerce, users still prefer cash-on-delivery as their preferred choice despite being internet savvy. More than 50 percent of the online shoppers opt for cash-on-delivery instead of other facilitated options like online banking and credit card. This mindset among the Indian customers has proven to be very complex and deeply rooted. The reasons are multi-layered which we shall explore layer by layer to have a better understanding of users’ shopping behaviour on the e-commerce platform.

Old habits die hard, it is a very suitable saying when it comes to opting for COD, Indians are more comfortable with cash payments than the digital mode of payments. Here, lack of trust on internet plays a vital role as despite having debit card, customer has more faith in cash withdrawal. Moreover, Indians like to implement the same method they have been accustomed to all these years while shopping at retail i.e. via COD. Though the internet penetration in our country is likely to grow manifold, there is a need for more secure methods to break the traditional modes of payment and make the customer more confident and comfortable with digital payments. This can include making the digital transaction less confusing and intimidating, providing more security against online fraud and data breaches, instigating better cyber laws. There is a need to establish an eco-system which can make the user more confident about the digital transaction, else Indian e-commerce will keep dwelling on managing cash-on-delivery payments which is again a more complex method on the e-commerce point of management.

When a person buys something online there is a huge possibility that he might change his mind or not receive the satisfactory product and then starts the tedious process of filing refund with the e-commerce website in case the online payment is done. Thus to avoid the follow up of refund, people opt for COD which is more controlled mode of payment that gives the customer a chance to check the product physically before paying for it. Speaking of the customer share that opts for COD, it’s a whopping 83 percent that choose COD while shopping online.