There is an assumption that cash no longer holds the highest seat on the throne since digital wallets, mobile apps, and cryptocurrency are in vogue and redefining shopping. Yet, in emerging markets, COD is still holding strong. While the rest of the world is rushing toward a digital mode of transaction, COD remains the nod of approval for millions. Why is that? What makes COD so strong, and should your business offer it in 2025?
This article takes a deep dive into the world of COD how it works, why it is still relevant, and the positives and negatives for both businesses and consumers in deciding whether COD has a place in your business in the cashless economy of today.
What Is Cash on Delivery?
Cash on Delivery (COD) is a payment method in which the buyer makes the payment when the product is delivered and not during the online checkout. The payment can be through cash or, presently, by using a debit/credit card on a portable POS machine. COD has been existing through the years, even before the e-commerce houses came into being. Since late, with the global rise in online trading, its popularity has surged, especially in countries with weak digital infrastructure or low consumer trust in making payments online.
This payment method is prevalent, particularly when consumers are unbanked or underbanked, unfamiliar with online payment, or unwilling to use online payment platforms. To a very large number of users, especially those in rural areas and developing countries, COD is not a mere convenience but necessities.
Why COD Remains Relevant in 2025
COD remains the e-commerce mainstay even in 2025. In the first place, it has to do with the aspect of trust. Millions of consumers are wary of offering their credit card details online in some parts of the world. They fear they might be cheated, the product quality might be inferior, or the returns policies are ambiguous. When COD is ushered in, there is a sensation that they are safer, as the money exchange will be done only when the product is physically in their hands.
The other aspect of convenience also comes into play. Many areas still come under the radar of low internet connectivity or digital banking penetration. COD then becomes not one of the options but most of the time, the only option for payments available. It creates a bridge between e-commerce and their old ways of traditional shopping.
Cultural elements provide another very significant influence. In many parts of Africa, Asia, and the Middle East, cash remains deeply embedded in everyday living. Consumers are accustomed to working with actual money, and COD fits neatly into these time-honored practices. For loads of folks, it just feels better to do cash, especially when online shopping sometimes turns into a hit-or-miss deal on the product expectations.
Benefits of COD for Consumers and Businesses
There are several benefits of Cash on Delivery that make it attractive to both parties in the transaction.
To consumers, one of the most obvious benefits is peace of mind. They don’t have to risk paying for something they haven’t seen. If the product turns out to be defective or not as good as they hoped, they can refuse delivery with no fear of having to process a refund. It’s also very easy to access. COD requires no bank account, credit card, or mobile app just cash at hand. This opens it up to millions of customers who might otherwise be excluded from online buying.
For businesses, COD can prove to be a useful way of driving sales and entering untapped markets. With COD, businesses are able to win over customers who would otherwise shy away from shopping online. It can actually push conversion levels, especially among first-time buyers who are apprehensive of the quality of a product or the authenticity of a new online store. In competitive industries, offering COD can also be a point of differentiation that builds brand loyalty and trust.
Drawbacks and Risks of COD
Although it has a lot of advantages, COD has some serious disadvantages. The biggest problem for businesses is the large number of returns and order refusal. There are consumers who order products impulsively and then deny receiving the goods at the door. This causes lost shipping costs, additional logistics burden, and increased inventory management problems.
The second problem is delayed payment. Unlike prepaid orders that bring revenue in right away, COD orders cause the business to hold out for the product’s shipment and cash receipt. This can cause problems with cash flow, especially for small companies that rely on constant revenues to operate.
COD also complicates operations. Delivery personnel not only need training for handling logistics but also for receiving and managing cash. This subjects the company to loss, theft, and human error. In places where infrastructure is lacking, being able to track and manage cash effectively can be a logistical nightmare.
Additionally, COD returns cost more to process than prepaid returns. The reverse logistics — if the product must be brought back to the warehouse and processing of unsold inventories can eat into profit margins significantly.
Do You Still Need To Offer COD in 2025?
Whether or not to offer COD is highly dependent on your target market, business model, and ability to operate. If you’re in markets or regions where adoption is still low, COD is not only suggested — it may be required. It allows you to access broad swaths of the population that are digitally excluded or wary of online payments. In those markets, not offering COD could severely limit your potential customer base.
But if you operate in a country with excellent digital penetration and robust e-payment infrastructure, then you may need to revisit your COD policy. In such instances, COD will create more problems than it solves. A hybrid model, however may be effective instead of altogether dropping COD. So, you can make COD available for orders below a threshold or for verified repeat buyers only. You can also promote prepaid orders with minimal discount or reward points.
Some companies also implement order confirmation procedures such as SMS verification or calls before shipping out a COD order. These simple steps can reduce fraudulent orders and improve overall delivery success rates.
The Future of COD
While it’s not going to become obsolete anytime soon, its role is in transition. As digital infrastructure keeps evolving and consumer trust in online payments grows, COD will likely become an alternate or secondary option, not a staple. Nonetheless, in the near future, it will continue to be a gateway for tens of millions of online commerce first-timers.
What businesses need to understand is that COD is not a method of payment it’s a tool to be employed in customer experience. It speaks to people’s trust, convenience, and consumer behavior. The way it is managed can unlock new opportunities, generate more affinity, and drive up sales in economies that are still a cash culture.
Cash on Delivery can appear to be an uncomplicated notion, but its potential for e-commerce is enormous. It offers access, trust building, and enables online companies to get closer to consumers who are still finding their feet in the transition from brick and mortar retailing to internet purchasing. But it also has logistical, financial, and operational issues that cannot be dismissed.
If you’re a business owner, take the time to assess your market, study your customer behavior, and evaluate whether cash on delivery (COD) aligns with your goals. And if you’re a shopper, remember that COD is not just about convenience it’s about control and confidence in your purchase.
So, is Cash on Delivery king in 2025 anymore? For most of the globe, the answer is still an unequivocal yes but with caution, strategy, and flexibility.