With new technologies, such as inexpensive chip readers that connect to mobile phones and integrated in-app payment solutions, it's easier than ever for businesses to accept credit card payments at the time of delivery. 

In the highly competitive ecommerce space, some businesses are looking to leverage a growing desire from customers to pay for their items only when they are delivered to their doors, with cash and card on delivery options becoming a unique selling point for merchants to differentiate themselves from competitors. 

This week we'll be taking a look at the revival of Payment on Delivery and how to determine whether it's an appropriate feature for your business.

What are the Benefits?

When it comes to accepting credit card payments at delivery, there are a surprising number of benefits for both retailers and the consumer. 

On the consumer side, customers get the opportunity to inspect their items before making a payment and can be assured that the goods are genuine. 

For retailers, this method allows merchants to verify that the customer is real and that goods are delivered safely, and that the customer is happy with the product. 

New Technology Enabling Credit Card Payments at Delivery

There are two primary technologies that have simplified the process of accepting credit cards at the time of delivery; Mobile Wallets and Smartphone based POS. 

Both technologies work to remove obstacles traditionally associated with accepting credit cards in the real world and can allow just about any business to securely accept payment at delivery.

Mobile wallets were first introduced to markets in 2014 with Apple’s announcement of Apple Pay across the iPhone lineup. In the following years, major competitors have rolled out their own mobile wallet platforms, such as Samsung Pay, Android Pay, and Microsoft Wallet. 

This trend has put digital wallets into the hands of millions of potential customers making credit card payments easier than ever. And for businesses, it has provided a brand new way to think about cash on delivery. 

By catering for the technology that customers use, businesses can now accept phone-to-phone payments seamlessly at the time of delivery.

For some customers, it’s is still necessary to use a physical card via either the magstripe reader or the chip and pin. Fortunately, technology for traditional credit card payments has also made the jump to smartphones. 

Thanks to companies such as Square, NFC and Magstripe, card readers can be integrated directly into today’s smartphone. For businesses, this means that even without a digital wallet processing method, they can still accept credit card payments at delivery through a familiar POS system.

These two technologies have drastically lowered the cost and technical barrier to entry for accepting credit cards in the real world. Any business that sees value in credit card payments at delivery can now capitalize on the opportunity.

Should Your Business Integrate Payment on Delivery?

When it comes to offering payment on delivery, this option will be the most attractive for online retailers who deal with high-value items such as smartphones, tablets, and computers. For many customers, there is a level of anxiety that comes with making the full payment then waiting for a delivery. 

This anxiety can often be a major obstacle for converting customers and by giving customers the flexibility to make their payment once they have the physical product in hand, this anxiety can be eliminated.

Another group uniquely positioned to benefit from payment on delivery is the online clothing industry. This sector is notorious for high return rates as a result of people buying multiple items, trying them on, and then returning any products they don't like. 

With a 'payment on delivery' option and a logistics strategy that allows consumers to try products before they make a final purchase, businesses can eliminate losses associated with frivolous return behaviour.

Finally, it's important to consider the potential benefits of face-to-face interactions with your brand. Provided you invest in good staff and appropriate customer relations training, payment on delivery can provide a great opportunity to talk to customers and gather valuable intelligence about what your customers like and what they don't. 

Conclusion

Payment on delivery won't be a perfect fit for all businesses but it has proven to be a useful method for many.

In one of the world's most completive industries, offering a payment on delivery option may give you the USP (unique selling proposition) you need to stand out from the competition and reduce unnecessary conversion barriers. 

Has your business experimented with a payment on delivery option? Do you think that new technology can revive this once outdated payment method? Let us know in the comments below or on Twitter where you can see our latest updates and news! 

Sources

  • http://digestafrica.com/cash-on-delivery-jumia-mobile/
  • https://www.entrepreneur.com/article/294888
  • https://delivering-tomorrow.com/wp-content/uploads/2017/11/01dhl-ecommerce-customer-needs-in-ecommerce-whitepaper-en.pdf
  • https://www.paymentvision.com/blog/2017/12/26/7-trends-that-prove-mobile-payments-are-here-to-stay-in-2018