Cash on Delivery Still Rules Indian E-Commerce, Despite UPI

July 27, 2026July 27, 2026

Cash on delivery still rules Indian e-commerce, making up 60% of orders and climbing to 75% in smaller cities and towns.

The habit runs deeper than most people assume. It has nothing to do with a lack of confidence in digital payments per se. Shoppers simply prefer to pay only after they’ve seen the product in hand.

E-commerce companies are now being forced to reconsider how they handle expenses because of that one peculiarity in behavior. Cash on Delivery creates two real headaches for companies. The first is working capital.

Brands spend money on manufacturing, packaging and shipping well before knowing whether the customer will actually pay on delivery. The second is returns.

CoD orders see return rates of 20 to 30%, and every failed delivery still costs the company in freight, packaging and handling fees, even though no sale happens.

Different sectors feel this differently. Quick commerce has mostly moved past Cash on Delivery, with cash orders making up less than 5% of that segment.

Traditional e-commerce and D2C brands aren’t so lucky. At handbag brand Miraggio, CoD still makes up 44% of orders.

Feminine hygiene brand Sirona Hygiene sees just over 20% of its shipped orders paid this way, down sharply from more than half a few years ago. Rather than fighting CoD outright, companies are trying to make it cheaper to run.

Logistics firm Velocity Shipping now uses AI tools to flag risky CoD orders and verify delivery intent before a shipment gets returned, a move it says has cut return rates by 5 to 7%.

Brands are also experimenting with partial Cash on Delivery, where customers pay a small amount upfront, and UPI mandates that only debit the full amount once the delivery is confirmed.

Sirona has used this kind of pin-code level targeting to bring its own CoD share down from over 50% to about 20% over time.

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