Cash-on-delivery makes comeback as payment method of choice

Despite increasing digital adoption, online merchants still need to provide a cash payment option for customers who may be skeptical of products offered and are thus hesitant to pay online, according to e-commerce solutions provider Enstack.

Enstack CEO and co-founder Macy Castillo, in a briefing on Friday in Taguig, raised the need for entrepreneurs to offer multiple payment methods—including cash-on-delivery (COD) schemes and digital payments through e-wallets and direct debit—to cater to the preferences of customers.

“We expect cash to still be very prominent as a payment option. But of course, we know that a lot has shifted to [digital payments], especially e-wallets,” said Castillo, who previously worked at e-commerce platforms Zalora and Shopee.

Before the pandemic, about 70 percent to 80 percent of online transactions conducted via their platform were paid for in cash, she said.

Castillo noted COD transactions slowed down during the first few years of the pandemic when virus transmission was at its peak and customers were limiting physical interactions as a safety measure.

But COD transactions have been recently recovering, now accounting for above 50 percent, she added.

Consumer behavior

The Enstack official described this consumer behavior as “cultural for us.” She said some customers prefer to physically see the delivered items before paying for them to ensure these meet their expectations.

Enstack, established in Feb. 2022, is a homegrown company that provides small and medium enterprises (SMEs) digital solutions supporting payment portals, logistics and store management, including inventory tracking.

It currently has nearly 100,000 merchants but the company is targeting to grow the list this year as it ramps up presence in the provinces. Most of these merchants are based in Metro Manila while others are scattered across the regions, including Bacolod, Cebu and Albay.

Popular categories on the platform are food, fashion and beauty.

“This year marks a unique time for small businesses as they become more digitally savvy in a postpandemic retail landscape,” Castillo said.

—Tyrone Jasper C. Piad