Cash on Delivery (COD) as an Alternative Payment Method for E-Commerce Transactions: Analysis and Implications

Cash on Delivery (COD) as an Alternative Payment Method for E-Commerce Transactions: Analysis and Implications

Mohanad Halaweh (College of Business Administration, Al Falah University, Dubai, UAE)
Copyright: © 2018 |Pages: 12
DOI: 10.4018/IJSKD.2018100101
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Since the emergence of the World Wide Web, various payment methods for e-commerce transactions have evolved rapidly over time, including credit cards, debit cards, smart cards, e-cash, e-checks, and e-wallets. In recent years, however, the use of cash-on-delivery (COD) has increased. This differs from all other methods of payment in terms of processing, time and place of payment, and parties involved, as well as security and privacy assurance. The aim of this article was to compare COD to other e-payment methods and to consider the implications of COD for both customers and e-vendors. The article also discusses implications for e-commerce practice and highlights areas for future research.
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Literature Review

An online payment or e-payment is initiated, processed, and received electronically via the Internet. Methods of payment used in e-commerce transactions include credit cards, prepaid cards, smart cards, e-cash (digital cash), and e-checks (digital checks), all of which are also mobile-enabled. While credit card is the most common e-payment method globally (Kou, 2013), existing research has identified COD as one of the preferred e-commerce payment methods in countries such as India, Saudi Arabia, Jordan, and UAE (Gangeshwer, 2013; Makki & Chang, 2015; Yaseen et al., 2016; Halaweh, 2017; Halaweh, in press).

According to previous research, the critical factors in customers’ reluctance to participate in e-commerce transactions or to use existing e-payment methods are trust, security, and perceived risk (Bolt, Humphrey, & Uittenbogaard, 2005; Daştan & Gürler, 2016; Hamid & Cheng, 2013; Halaweh and Fidler, 2008; Kim, Tao, Shin, & Kim, 2010; Lee, Yu, & Ku, 2001; Lim, Lee, & Kurnia, 2007; Özkan, Bindusara, & Hackney, 2010). A further issue is that e-payments also generate information that can be used to analyze customer purchasing behavior or for other purposes that may violate customer privacy. Other important concerns found to affect general acceptance of e-payment methods include cost, usability, simplicity (complexity), and availability or acceptance by e-commerce websites. However, database searches for relevant research papers returned relatively few results focusing on the adoption and use of COD payments in an e-commerce context.

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