Cash on delivery (COD) continues to play a crucial role in India's e-commerce sector, accounting for nearly 50% of all online orders. Despite the rapid growth of digital payment systems, particularly through the Unified Payments Interface (UPI), many first-time shoppers, especially in smaller towns, remain hesitant to pay upfront. This reluctance stems from concerns about delayed deliveries, incorrect products, and slow refunds. COD provides a safety net, allowing customers to inspect their purchases before payment.

While COD presents operational challenges for sellers, such as higher return rates and cash remittance delays, it is viewed as a vital market access tool. Brands that limit COD options often see a decline in conversions, particularly in regions where consumers rely on it. To mitigate risks associated with COD, companies are increasingly adopting data-driven approaches, assessing customer history and order value to offer COD selectively. As India's e-commerce market expands, particularly in non-metro areas, the reliance on COD is expected to persist until digital literacy and trust in online transactions improve.