Cash-on-Delivery is How Ecommerce Rolls in Southeast AsiaCash-on-Delivery is How Ecommerce Rolls in Southeast Asia
This week, we’re talking about the important stuff: Getting paid!
The credit card system of payment that oils the wheels of commerce in the US and Europe is far from being standard operating procedure in Southeast Asia. According to The Economist less than 10% of the region’s people own credit cards, and many of those who do avoid using them online because they’re concerned about getting ripped off.
COD Is Good for Me
In SEA it’s common to pay for products via bank transfers and cash on delivery. Many people in Thailand even pay their bills in cash at the ubiquitous 7-Elevens. Lazada.com, Rocketinternet’s stab at becoming the Amazon.com of Southeast Asia, says many of its customers prefer COD.
The popularity of COD is primarily due to trust issues. Online shoppers are concerned over whether they’re going to get the product they expect, or even if anything will be delivered at all.
Managing Transactions With a 50-70% Cancellation Rate
Paul Srivorakul of logistics company aCommerce says 50 percent to 70 percent of Southeast Asia’s over the counter, bank and ATM transactions are canceled, while the cancellation rate is only 5 percent to 8 percent for COD. “In order to win Southeast Asia’s e-commerce sphere, companies need to invest in cash on delivery, no matter how difficult,” Srivorakul said in a post on LinkedIn. “Just as same-day delivery was Jeff Bezos’ challenge at Amazon, we see COD as a new standard of service required for our market.”
SEA’s many currencies also pose a problem for companies. Businesses who are not prepared to accept a range of payments, including COD, will struggle.
Meanwhile in Australia
In contrast, or perhaps as a glimpse for things to come, in nearby Australia online shopping is the leading purpose for using credit cards. Many venues Down-Under support a tap-to-pay system where customers can tap their phones against a special card reader.
COD Is Good For Me
- Accept COD, transfers and other types of payments besides credit cards. How? Talk to us…
- Accept a variety of currencies.