Due to the increasing influence of digitalization of e-commerce companies, people often do online shopping. During this time most people opt for cash on delivery (COD). E-commerce companies also have the most earnings this way.
But you will be surprised by the reply given by the Reserve Bank of India for an RTI. Accordingly, the option of cash on delivery is not authorised. RBI says that cash on delivery can be the Regulatory Grey Area.
Responding to a question asked in the RTI, the RBI said that collection of payments is not authorized on the platform like Amazon and Flipkart. In response to the RTI filed by Dharmendra Kumar of India FDI Watch, the top bank said, "Payment Intermediaries like Aggregators and Amazon-Flipkart are not authorized under the Payments and Settlements Systems Act, 2007."
However, some legal experts said the rules don’t necessarily invalidate cash-on-delivery. The Act mentions electronic and online payment, but doesn’t make explicit mention of money received through the cash-on-delivery route.
In the RTI filed by Dharmendra Kumar, it was asked whether collection of cash from customer by e-commerce companies like Flipkart and Amazon and distributing them in their merchants, comes under the Payments Settlements Systems Act, 2007?
Let us tell you that Flipkart, Amazon and other e-commerce companies collect money from their customers through cash on delivery and when they are supplying goods they do so through third party vendors.
(Also read: RBI to Issue New Design Rs. 100 Denomination Banknote)
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