Major e-commerce players including Flipkart, Amazon and BigBasket have stopped the CoD (cash-on-delivery) mode of payment following the government's decision to scrap the existing Rs 500 and Rs 1,000 notes in the country.
A Flipkart spokesperson said the option for CoD has been stopped temporarily for orders above Rs 1,000.
Amazon has also disabled the option at present for orders over Rs 1,000.
Several food delivery portals have also stopped the CoD mode and have urged their customers to choose alternative modea of payments such as debit/ credit cards or payments through wallets.
E-commerce players will face interim difficulty as a large number of orders in India are still fulfilled through cash-on-delivery.
The business could be impacted for the time-being as a large part of the orders comes from the smaller towns where CoD is the most preferred option. However, the option will soon be restarted as the government plans to reintroduce the Rs 500 note along with new Rs 2000 note with enhanced security features soon.
Meanwhile, digital wallet players such as Paytm, FreeCharge, Oxigen, among others, are likely to get an instant boost as more and more people would use the option to buy essential items. Paytm, for example, has tied up with several kirana and neighbourhood stores over the last few months to make payments easy for both consumers and the retailers. Several toll booths also accept Paytm and FreeCharge as modes of payments.
Meanwhile, Apoorva Ranjan Sharma, Co- Founder, Venture Catalysts, felt that the recent announcement on discontinuing Rs 500 and Rs 1,000 currency notes is a positive step towards embracing the cashless economy in India.
"While the government’s primary objective behind this initiative is to curb black money and overcome corruption, this will also play an active role in the growth of e-commerce as well as give a new dimension to FinTech players. A golden era for FinTech start-ups has started. The move will affect the common man briefly; however, it will bring a revolution in the digital payments ecosystem, urging people to come online," he added.