Cash-on-Delivery, fueling the growth of online retail

by Ofri Kadosh

In today’s digital shift, Filipinos are getting more hooked up with purchasing products and services online. In fact, the user penetration is at 35.2% for 2018 and is expected to hit 47% in 2022, as revealed by a report released by a research organization, Statista.

The Philippines, a booming market for the e-commerce industry, had an annual revenue of approximately 1.6 billion dollars in 2017. While these numbers show that the e-commerce sector continues to thrive in the country, 72% of its population remains unbanked. Thus, many local merchants lose out on millions of customers who prefer cash.

To reach more customers, merchants need to adopt a payment option trusted and used by most Filipinos—Cash on Delivery. Some may say that going cashless is the direction of the digital age, but with 93% of the Filipinos using CoD when shopping online, it is arguable that cash is not going anywhere just yet.

With the e-commerce revenue expected to reach $5.5 billion in 2020 in the country, it is important to understand how the CoD business model changes the way e-commerce in emerging markets, like the Philippines, run.


While online retail giants, such as Lazada and Zalora, once controlled 90% of the e-commerce transactions, a shift in the last few years made independent sellers launch their own platform through Shopify, Instagram, and Facebook, which accounts to 40% of the transactions today.

The internet market in the Philippines is still considered to be one of the biggest in the world and access to smartphones and the internet pushes people to shop online. With many Filipinos still unbanked, it is apparent that, at present, the only way to extend the reach of e-commerce platforms in the Philippine market is through CoD payment option.

This holds tremendous potential for small merchants to scale their business and make use of CoD payment option to reach more customers and, at the same time, increase their revenue.


The CoD gateway system helps merchants who do not have e-commerce platforms seal the service of partner couriers. This allows small merchants, as well as big brands, to work with a number of couriers while covering different parts of the country to keep pace with the items being delivered while helping retain the purchasing tensions of their customers.


According to a Kuala Lumpur-based online shopping aggregator, iPrice, more merchants in the Philippines are integrating CoD services to their consumers. This is understandable with the number of Filipinos who still prefer CoD when buying online.

For countries with low number of bank accounts and credit-card penetration, such as the Philippines, CoD allows e-commerce platforms be available to more consumers.

It is a crucial time for merchants to make use of CoD gateway system that provides a full-suite of technological solutions, such as fraud detection, data analysis, and courier optimization.

Payo, a CoD gateway system, empowers the merchants with abilities to seize control of the CoD process, reduce cancellations and increase revenues, as it manages and simplifies transaction for e-commerce platforms.

It is the only payment gateway to take the CoD logistic process to a technological level allowing merchants to integrate and offer solutions to their customers.

Starting small and witnessing the growth of the business demonstrates how a gateway system like Payo can fuel online retail. Leveraging CoD transaction opens the e-commerce business to everyone. There will be other payment options in the future but cash transactions are not going anywhere and it is time for merchants to start harnessing its benefits.




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