The primary reason towards the success of e-commerce in Ghana is the CoD or the Cash-on-Delivery option provided by online retailers, as a lot of Ghanaians consumers are afraid to swipe their credit cards on online sites. The Ghanaian consumer wants to get a feel of the goods before paying for them, and that is a major driving factor towards the success of e-commerce in Ghana.

Compared to developed countries, electronic commerce in Ghana is heavily dependent on CoD. Although it brings comfort to the consumers, the sellers, marketplaces and the logistics service providers face a lot of issues in managing the CoD orders.

CoD payments problems

• Since the customer hasn’t paid in advance, they can always cancel/refuse to take the delivery, and sight reasons like I found this phone cheaper in a different store and have bought it from there, or I have changed my mind, will buy a new laptop later.
• Because customers who place COD orders haven’t incurred any cost, they usually turn out to be much more fickle at the time of delivery.
• CoD transactions are expensive for the seller, especially in the case of product returns.

Current status of CoD mode of payment Elsewhere

China is booming e-commerce industry, ruled by Alibaba’s payment wallet Alipay. CoD declined to a small extent in China when Mobile wallets were introduced; however, it turned out to be a major hit when Mobile wallets started offering interests to users. In Ghana, mobile wallets such as MTN Mobile Money and other mobile money services have been very popular and could further prove out to be the game changer, if they could offer some interests on the money sitting idle in the user’s wallet.

How retailers can promote online payment modes.

• Encourage customers to pay digitally by offering discounts or freebies: eCommerce companies can run promos or discount offers only for consumers who are paying online. Additionally, they can also offer free delivery offer to customers who pay online.
• Offer multiple online payment options: Some eCommerce portals do not accept all debit and credit cards, which often forces users who did want to pay online to opt for the CoD payment. To encourage online payment, they should increase the available online payment options to include wallets, mobile banking, and SMS payments
• Card on Delivery: eCommerce players can introduce card on delivery payment method which does away with some of the issues of the cash on delivery and also provides benefits of the online payment methods.

Road forward

Well, the CoD option may not be going anywhere just yet, there is a sea change in the way consumers are spending their money. Options such as Mobile money service are assisting customers in making small ticket payments. Better infrastructure and the right technology can cause a lot of dent in the percentage of CoD transactions and can eventually help the entire value chain of this industry.