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Zomato adds pay-on-delivery fee for cash food orders
Our read
Zomato's COD fee will primarily function as a behavioral pricing tool: it should push more users to prepaid payments and lower cash-order operating friction, with revenue upside secondary to improved unit economics.
For operators
Zomato’s Rs 5 cash-order fee can lift unit economics while steering customers toward lower-friction prepaid orders, but operators should monitor whether the charge suppresses conversion among cash-dependent users.
Watch
Change in cash-order share and prepaid-payment conversion after rollout.
Ask next
The report,
Zomato has introduced a separate pay-on-delivery fee, typically Rs 5, for cash food orders, with reported variations. Online payments are exempt. The move adds a new monetisation lever amid intensifying Indian food-delivery competition.
- Typical pay-on-delivery fee, cash food orders₹5
- Pay-on-delivery fee reported in some cases (₹6)₹6
- Pay-on-delivery fee reported in some cases (₹7)₹7
- Pay-on-delivery fee reported in some cases (₹20)₹20
Reported figures
From the report. Source details below
- Rs 7 fee reported in some cases
- Rs 20 fee reported in some cases
- Rs 6 fee reported in some cases
- 2.3-2.5 million daily orders
- Rs 1.15-1.25 crore theoretical daily revenue
- Rs 420-456 crore theoretical annual revenue
Other figures
- 240 Hyderabad employees
Why it matters to operators
The move reinforces that payment behavior is becoming a strategic margin lever in Indian food delivery, making fintech, wallet, and loyalty partnerships more valuable targets for platforms seeking prepaid-order adoption.
What to watch next
- Order conversion and repeat-rate trends among historically COD-heavy users.
- Average order value and cancellation/return-to-origin rates for COD versus prepaid orders.
- Evidence of fee variation above Rs 5 by geography, basket size or user segment.
- Customer complaints, social-media backlash or regulatory scrutiny over surcharge disclosure.
- Swiggy or other delivery platforms launching matching cash-order fees or COD restrictions.
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Test higher or dynamically priced pay-on-delivery fees by city, basket value, customer frequency and peak-demand periods.
- Pair the fee with targeted UPI/card incentives, wallet offers and saved-payment prompts to accelerate prepaid conversion.
- Tighten COD eligibility for high-cancellation users, remote delivery zones and low-value orders.
- Reframe the charge as a cash-handling or service fee if customer pushback increases.
- Monitor competitor pricing responses, especially Swiggy's treatment of cash orders and platform fees.
The counter-case
The case against this reading — not reported by the source.
A Rs 5 cash-order fee may generate little meaningful revenue while risking friction among price-sensitive users, especially in smaller cities or cash-reliant cohorts. Customers could shift to rival platforms, reduce ordering frequency, or move to online payment only if they already have access and trust in digital methods—limiting the claimed behavioural upside. Variable charges by user and order may also create perceptions of opaque or discriminatory pricing. Since cash orders likely carry higher handling, reconciliation and delivery-failure costs, the fee may primarily offset expenses rather than become a material monetisation lever.
The source
Published
Confirmed by Inc42, The Hindu BusinessLine, Times of India, CNBC-TV18, Mint, Financial Express
First seen