Cash on Delivery vs Digital Payment: What Nepali eCommerce Data Actually Shows

Digital payment adoption is growing fast in Nepal, but cash on delivery (COD) remains a significant share of online orders — and pretending otherwise costs conversions.

Why COD persists

Trust in a new online storefront takes time to build. Many first-time customers want to see and verify the product before paying, especially for higher-value items or unfamiliar brands.

The real cost of COD

Higher return/refusal rates, cash handling logistics for delivery staff, and delayed cash flow compared to instant digital settlement — COD isn't free, it just shifts the cost elsewhere.

A practical middle ground

Offer both, but nudge toward digital with a small incentive (free shipping, a discount) for prepaid orders — this shifts mix gradually without alienating COD-preferring customers outright.

Reducing COD refusal rates

Order confirmation calls or SMS before dispatch meaningfully reduce refusal rates — a small operational cost that prevents a wasted delivery trip.

Building or optimizing an online store's checkout flow? Talk to us about a payment mix that matches your actual customers.