E-commerce's Cash-on-Delivery mechanism not authorised
New Delhi, July 24 (IBNS): The Reserve Bank of India (RBI) on Tuesday stated that the Cash-on-Delivery (COD) mechanism, on which maximum e-commerce purchases depend, is not authorised under Section 8 of the PSS (Payments and Settlements Systems) Act, 2007, media reports said.
The apex bank made this statement as a reply to a Right to Information (RTI) query.
The COD mechanism is extensively used by popular e-marketplace including Flipkart, Amazon and others for collecting money from the customers.
According to RBI, cash is collected from customers on behalf of third-party vendors at the time the goods are delivered.
“Aggregators/payment intermediaries like Amazon and Flipkart are not authorised under Section 8 of the PSS (Payments and Settlements Systems) Act, 2007,” the apex bank was quoted by media in its response to the RTI application.
However, several legal experts are of the view that this does not necessarily invalidate the mechanism.
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