Cash on Delivery Payment Option Illegal by Ecommerce Company: RBI Reply to RTI

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Cash on Delivery Payment Option Illegal by Ecommerce Company
Cash on Delivery Payment Option Illegal by Ecommerce Company

In India there are different payment option , in which cash on delivery payment option widely used in India and Offered by almost every leading e-commerce company like Flipkart, Amazon and other. according tot he Reserve Bank of India in a response to RTI noted that collection of money by e-commerce companies are not permissible, however it is not yet explicitly illegal.

 

A new reports suggests that the Cash on Delivery option was not authorized by RBI.

RBI’s response to an RTI query stating, the Economic Times, “Aggregators/Payments intermediaries like Amazon and Flipkart are not authorized under the section 8 of the Payments adn Settlements Systems Ac, 2007″

 

 

Some lawyers say that the Act itself does not contain a specific mention of cash payment against which delivery is effected and those in agreement with this reasoning claim that there is nothing illegal about the Cash on delivery Payment for online purchase.

While some analysts of e-commerce and FDI experts are arguing that the RTI reply does not Cash on delivery model entirely illegal, other are stating that RBI should now taken action, and stop e-commerce players from using Cash on Delivery model for payment.

 

Abhishek A Rastogi , a lawyer was saying by the business newspaper, The Payment and Settlement System Act. 2007 should apply for CoD transaction by E-commerce operators.

 

CoD should be done by a contractual arrangement between ecommerce operators and merchants. these will be regulated by the Payment and Settlement System Act, 2007.

This by no means makes the CoD option illegal or unauthorized, A A Rastogi, partner at Khaitan & Co was quoted by ET.

 

The query raised by the India FDI watch, ,an activist group, that claims to stop the takeover of India’s retail sector by corporations. Naturally this group feels strongly about any practice that the companies giant adopt to popularize their business.

 

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