Cash-on-delivery deals on Amazon, Flipkart not authorised, says RBI. Read to know more

Are you a regular online shopper and Amazon, Flipkart are your favorite shopping apps? If yes, this piece of news might upset you. Reserve Bank of India (RBI) has noted that the Cash-on-delivery option is not permissible and is hinted as illegal.

The RBI had responded to an RTI query. The query was filed by Dharmendra Kumar of India FDI Watch. Dharmendra had enquired if the whole exercise of payment practiced by online marketplaces is righteous.

Dharmendra questioned the cash-on-delivery (CoD) payment option and disbursement of money to e-commerce merchants by e-commerce marketplaces such as Flipkart and Amazon. He said if the payment complies with Section 8 of the Payments and Settlements Systems Act, 2007 or not.

Reports suggest that people prefer to make cash on delivery payments. People are not opting for online payments or debit card payments. The catch is that if RBI takes any hard decision, the e-commerce sector will be distorted and it’s not a small deal as the e-commerce sector is 30 billion in India.

In response to the RTI, RBI said, “aggregators/payment intermediaries like Amazon and Flipkart are not authorized under Section 8 of the PSS (Payments and Settlements Systems) Act, 2007.”

It was in 2007 that The Payments and Settlements Systems Act came into effect. Later, in August 2008, the act started regulating and supervising all the payment systems in India.

Abhishek A Rastogi, a lawyer said, “It (CoD) can be done through a contractual arrangement between e-commerce operators and merchants. These will be regulated by the Payment and Settlement Systems Act, 2007, rules and regulations framed thereunder.”

The RBI has not made any explicit announcement about the payments so its hard to decipher. But a major announcement could be expected soon. What will happen if COD option is entirely eradicated from the Indian e-commerce? Share your views below.

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