PayTm could choose not to charge buyer app commissions on ONDC

12 May 2023 , 08:32 AM

Paytm may forego the 3% commission it charges as a buyer app on ONDC due to the rapid expansion of orders on the Open Network for Digital Commerce (ONDC), according to an ET report. This move would increase customer participation in the government-backed e-commerce platform.

This could aid in further lowering the open-source network’s cost, which threatens Swiggy and Zomato’s monopoly in the food delivery market.

According to news reports, Paytm, one of the first buyer applications to launch on ONDC, intends to stop paying commissions on orders handled by sellers if there are no complaints from customers.

This is significant given that roughly one-third of all orders on ONDC are placed through Paytm. The network’s other prominent buying apps are PhonePe and Magicpin.

The CEO of ONDC, T Koshy, declined to comment on the specifics of the Paytm scheme, but he did tell ET that different network partners would be releasing various programs to promote the formation of the network.

Dilip Vamanan, the cofounder of SellerApp, one of the 27 seller side aggregators active on the network, stated that ‘there are three to four levers we can use to improve the adoption on the (ONDC) network.’ Seller apps are systems that cater to retailers and link them with ONDC.

‘Previously, the initiative that was taken was free delivery or incentives on delivery,’ he said in an interview with ET. There is an incentive program that is carried out each month. client adoption might improve if a buyer app gives up its commission so that it can be donated to the client. We can speak with our sellers and request that they take the commission out of the sale price. With Shopify, this is already taking place.

As of Tuesday, there was about 199,000 retail orders total on the ONDC network, 25,000 of which were added on Monday and Tuesday.

Since it was revealed that food orders sent through ONDC were significantly less expensive than those placed through Swiggy and Zomato, interest in the network has grown over the past week or so.

Prior to this, ONDC was providing customers with a discount on logistics of up to Rs 75 for each valid order. The incentive, however, will only be given up to a maximum reward of Rs 2,25,000 per seller-side app per day and a maximum incentive of Rs 3,750 per seller per day, according to a statement ONDC addressed to seller-network members on May 7.

Prior to May 9, most hyperlocal orders were delivered free of charge to clients, but this is no longer the case.

Additionally, ONDC has been paying buyer-side applications like Paytm and Pincode an incentive of Rs50 to provide customers with a comparable discount on orders over Rs100. Additionally, that has now been limited to 2,000 orders each day.

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