Business News

Paytm might skip the buyer app commission for ONDC, according to sources

Owing to the strong growth of orders on the Open Network for Digital Commerce (ONDC), Paytm may forego the 3% commission it charges as a buyer app on ONDC to further fuel customer participation in the fast-growing government-backed ecommerce platform, multiple people aware of the development told ReTale.

This may help to further reduce the price on the open source network that is already challenging the duopoly of Swiggy and Zomato in the food delivery space.

Paytm, one of the first buyer apps to go live on ONDC, plans to forego commission on orders fulfilled by sellers where there are no customer complaints, sources said.

This is significant considering Paytm accounts for about one-third of the total orders on ONDC. Other major buyer apps on the network include PhonePe and Magicpin.

ONDC CEO T Koshy refused to comment on the specifics of the scheme offered through Paytm, but told ReTale that various network participants will be coming out with different schemes to encourage establishment of the network.

Paytm did not comment on the matter.

“There are three to four levers we can use to improve the adoption on the (ONDC) network,” said Dilip Vamanan, cofounder of SellerApp, one of the 27 seller side aggregators live on the network. Seller apps are merchant-facing platforms that connect retailers with ONDC.

“Previously, the initiative that was taken was free delivery or incentives on delivery,” he told ReTale. “Every month, there is an incentive plan that is being executed. If a buyer app foregoes its commission and that can be given to the customer, customer adoption may become better. We can approach our sellers and ask them to reduce the commission from the selling price. This is already happening with Shopify.”

Cumulative retail orders on ONDC network reached almost 199,000 as of Tuesday, out of which 25,000 were added on Monday and Tuesday.

The last week or so has seen increased interest in the network after it was reported that food orders on ONDC were costing much less compared to Swiggy and Zomato. Food orders have also become dominant with a share of 70% among total retail orders on the network.

Previously, ONDC was offering an incentive of up to Rs 75 as discount to be provided for logistics for buyers on every eligible order. However, ONDC sent a communication to seller-network participants on May 7, saying the incentive will be provided only up to a maximum incentive of Rs 2,25,000 per seller-side app per day, and a maximum incentive of Rs 3,750 per seller per day.

Previously, customers were not being charged for delivery for most hyperlocal orders, which is not the case after May 9.

ONDC has also been giving an incentive of Rs 50 to buyer-side apps such as Paytm and Pincode to offer a similar discount to consumers for orders above Rs 100. That has also been recently capped at 2,000 orders per day.



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