Cash on delivery is still one of the most important payment methods for ecommerce in Pakistan. It gives new buyers confidence because they can pay when the parcel arrives. But COD also creates real problems for merchants: failed deliveries, delayed cash collection, fake orders, return costs, and working capital pressure.
At the same time, digital payments are growing. The State Bank of Pakistan reported that digital channels accounted for a very large share of retail payment transactions in FY25, with mobile banking and wallets continuing to expand. This creates an opportunity for ecommerce stores to use both COD and online payments intelligently.
When COD is useful
COD works best when:
- Your brand is new and customers do not fully trust it yet.
- You sell impulse products from ads.
- Your buyers are not comfortable with cards or wallets.
- You sell in cities where courier COD service is reliable.
COD can increase conversion, especially on first orders. For a new store, removing COD too early can reduce sales.
When COD becomes expensive
COD becomes painful when failed delivery rates increase. Every failed parcel can cost packaging, delivery attempts, return shipping, customer support time, and inventory delay.
COD is also slower. The merchant may wait days before receiving cash from the courier. That matters if you need money quickly to restock.
How to increase prepaid orders
Do not force every customer to pay online immediately. Instead, guide them:
- Offer a small prepaid discount.
- Ask for advance payment on high-value orders.
- Give free shipping for prepaid orders.
- Show secure payment badges.
- Use WhatsApp confirmation for new customers.
- Give repeat customers easier wallet or bank transfer options.
Best approach for Pakistan
The best strategy is usually hybrid. Keep COD for first-time buyers, but build habits around prepaid payments for repeat customers. Track failed deliveries by city, product, campaign, and courier. If one product has a high COD failure rate, require partial advance.
Eekaam stores can use checkout settings, order management, and payment options to support both COD and digital payment flows.
Final advice
COD is not bad. It is a trust tool. But if you want to scale profitably in Pakistan, you must measure it, control it, and slowly move the right customers toward online payments.