The Trust Gap in Online Shopping
One of the biggest reasons cash on delivery (COD) remains popular is trust. Many customers in emerging markets are still cautious about paying online before receiving their product. Concerns about fake websites, wrong products, damaged goods, or delayed refunds make people hesitant to prepay.
When customers choose COD, they feel more secure. They know they can inspect the package and only then hand over the cash. This simple psychological comfort plays a big role in keeping COD alive.
Limited Access to Digital Payments
While digital payment systems are expanding, not everyone has access to credit cards or feels comfortable using online banking. In rural and semi-urban areas, cash is still the primary mode of transaction. Even where UPI and mobile wallets are available, many customers prefer cash because it feels more direct and easier to manage.
In emerging markets, financial inclusion is still improving. Until digital literacy becomes universal, COD will continue to be a preferred option.
Habit and Cultural Preference
Cash has been the dominant payment method for generations. Changing long-standing habits takes time. Many families budget their monthly expenses in cash. Paying in cash gives them a clearer sense of spending control compared to online transactions.
For first-time online shoppers especially, COD feels safer. Once they build trust in a brand, they may shift to prepaid methods. But the first few transactions often happen through COD.
Higher Conversion Rates for Sellers
From a business perspective, offering COD increases sales. Many customers abandon their cart if COD is not available. For small and medium sellers trying to grow in competitive markets, removing COD is not an option.
Even though COD comes with challenges like return-to-origin (RTO) orders and delayed payments, businesses still prefer it over losing potential customers. It acts as a bridge between traditional shopping habits and modern e-commerce.
The Risk Factor and Returns
Yes, COD has risks. Fake orders, delivery rejections, and higher return rates can increase logistics costs. But despite these drawbacks, it remains strong because customers value flexibility.
In many cases, customers order multiple products and decide after seeing them. This behavior increases return rates, but it also shows that consumers are still transitioning from physical stores to online shopping. COD gives them the comfort of choice.
Logistics Networks Have Adapted
Over the years, courier and logistics companies have built strong systems to manage COD effectively. Secure cash handling, faster remittance cycles, digital proof of delivery, and real-time tracking have improved the process.
Technology now helps reduce fraud and manage risk. Advanced verification tools, confirmation calls, and AI-based order screening help companies filter risky orders. Because logistics providers have adapted to support COD, the system continues to function smoothly.
The Slow Shift Toward Digital
Digital payments are growing rapidly in emerging markets. Government initiatives, fintech innovations, and smartphone penetration are pushing more people toward cashless systems. However, this shift is gradual.
Customers are not rejecting digital payments, they are simply moving at their own pace. As trust increases and refund systems become faster, prepaid orders will grow. But for now, COD remains a necessary part of the ecosystem.
The Bottom Line
Emerging markets can’t quit the cash on delivery habit because it solves real problems – trust issues, limited digital access, cultural preferences, and consumer comfort. For sellers, it boosts conversions. For customers, it offers security. For logistics providers, it remains a major revenue stream.
A reliable cod courier company like Shipdaak understands that COD is not just a payment method; it is a transition tool helping millions move toward digital commerce step by step. Until trust, infrastructure, and financial literacy fully mature, cash on delivery will continue to play a vital role in emerging economies.