Cash on delivery in MENA: moving shoppers to online payment

A shop that starts selling into the Gulf, Egypt or Morocco soon finds a payment option it may never have offered at home: cash on delivery. Shoppers expect it, conversion looks better with it, and then the costs arrive in a different report. Parcels come back unopened, couriers hold the cash for days, and finance spends the month matching remittance files to orders.

This article explains how common cash on delivery (COD) still is in six MENA markets, what it really costs, how merchants move shoppers to prepaid methods, which rules apply to COD fees, and what changes in refunds. For the providers behind the prepaid methods, see our guide to choosing PSPs for MENA; for the regional picture, our MENA coverage page.

How common is cash on delivery in MENA today?

Less common than its reputation, but very uneven by market. Checkout.com’s fourth annual MENA report, published in May 2024, found that preference for cash on delivery across the region halved from 41% in 2020 to 20% in 2023. In Saudi Arabia, the UAE and Kuwait, cash preference dropped to as low as 10%. A third of shoppers in the same report said they would switch sites after one failed payment, which is the risk when the prepaid route is weak.

National data points the same way in Saudi Arabia. According to SAMA figures reported by Riyadh Daily, electronic payments were 85% of all retail payments in 2025, up from 79% in 2024, across 14.6 billion transactions, with growth driven mainly by mada at the point of sale and in e-commerce. Checkout.com’s June 2026 guide to Saudi payments adds that Saudi shoppers increasingly prefer mada or digital wallets to cash on delivery, and that 36% say paying with their preferred method is a top priority online.

Egypt is the opposite case, though the data is older. Business Today Egypt, citing Ministry of Communications and Information Technology data for 2021/2022, reported that about 98.4% of individuals who buy online preferred cash on delivery. Jordan’s instant payments are growing fast: JoPACC reports that CliQ transactions doubled from 83.95 million in 2024 to 167.92 million in 2025, with 2.13 million users. For Morocco we found no official figure for the COD share, so use your own order data.

Market	What the data says	Prepaid method to lead with
Saudi Arabia	E-payments 85% of retail payments in 2025 (SAMA); cash preference as low as 10% (Checkout.com)	mada, wallets, Tabby
UAE	Cash preference as low as 10% (Checkout.com)	Cards, wallets, BNPL
Kuwait	Cash preference as low as 10% (Checkout.com)	KNET
Egypt	98.4% of online buyers preferred COD in 2021/2022 (ministry data)	Fawry, cards
Jordan	CliQ doubled to 167.92 million transactions in 2025 (JoPACC)	CliQ, cards
Morocco	No official COD share found	CMI cards

Read the figures as direction, not as one comparable series. Survey preference, share of retail payments and instant payment volumes measure different things.

What does cash on delivery cost a merchant?

More than the courier’s COD fee. The fee is the visible line; most of the cost sits in orders that never turn into revenue and in cash that arrives late.

Cost line	What drives it	What to ask the courier or check in your data
COD collection fee	A charge per collected order, set in the courier contract	Fixed amount, percentage or both, and whether VAT applies
Refused or failed deliveries	Shoppers who change their mind, are not home or never meant to buy	Your refusal rate by city, category and first versus repeat customer
Return shipping	The parcel travels back to your warehouse	Return rate card, and whether refused parcels are charged as returns
Cash held by the courier	Collected cash is remitted on the courier’s cycle	Remittance frequency, cut-off days and how disputes over amounts are settled
Reconciliation	Remittance files list parcels, not your orders or refunds	File format, references per parcel, and how short payments are flagged

We found no reliable public figure for COD refusal rates in MENA, and published numbers from other regions vary too widely to borrow. Measure your own: refused and undelivered COD orders as a share of shipped COD orders, split by city and by new versus returning customers. That rate, more than any regional average, decides how hard to push prepaid.

How do merchants move shoppers to prepaid?

By making prepaid the easier and cheaper choice, without removing COD where shoppers still need it. The tools merchants combine:

• A small prepaid incentive. A discount, free shipping or faster delivery for orders paid online. Keep it below the cost a COD order adds, or the switch loses money.
• A disclosed COD fee. Some retailers charge for the service. Centrepoint in the UAE, for example, adds an AED 10 service charge to all cash on delivery orders, on top of its delivery fee for orders under AED 200.
• Limits on COD. Turn COD off above a basket size, for first orders in high-refusal areas, or for customers with past refusals.
• The local method shoppers already use. In Saudi Arabia that is mada, in Kuwait KNET, in Jordan CliQ. A checkout that shows only international cards pushes these shoppers back to cash. Our article on mada and local cards in Saudi Arabia covers the routing.
• Cash before dispatch. In Egypt, Fawry keeps the cash habit but moves payment before shipping. At EBANX, the checkout issues a reference number, the shopper pays it in cash at a Fawry agent or in the Fawry app, and the payment expires after 7 days if unpaid. Amounts run from EGP 1 to EGP 100,000.
• BNPL. Instalments can suit shoppers who chose COD to delay paying. Our article on BNPL in the Gulf covers Tabby, Tamara and the rules.
• Card on delivery. Where couriers carry card terminals, the shopper pays by card at the door. It cuts cash handling but not refusals, because the shopper still decides at the door.

Are there rules on COD fees?

In Saudi Arabia, yes, through disclosure. The E-Commerce Law, issued by Royal Decree M/126 of 10 July 2019, requires the seller to give the consumer, before the contract, the total price including all charges, taxes and delivery fees (Article 7), and an itemised invoice with the same after the contract (Article 8). A COD fee therefore has to appear at checkout and on the invoice, not be added by the courier at the door.

We did not review consumer rules in every market for this article. Before charging for COD in the UAE, Kuwait, Egypt, Jordan or Morocco, ask local counsel whether the fee must be shown separately and whether VAT applies to it.

What changes in refunds?

The refund path depends on how the shopper paid, and COD has no path of its own.

• COD orders. There is no card or account to reverse. The money goes back as a bank transfer, a wallet payout or store credit, which needs the customer’s details and agreement. Collect them in the return request, not after the parcel is back.
• Saudi withdrawal rights. Under Article 13 of the E-Commerce Law, a consumer may rescind within seven days of receiving an unused product and bears the cost unless agreed otherwise. Under Article 14, if delivery is more than 15 days late, the consumer can rescind and claim a refund.
• KNET. Checkout.com’s documentation says KNET supports full, partial and multiple partial refunds, but the merchant’s bank must first ask KNET to activate refunds. Do this before launch, not when the first return arrives.
• Fawry. EBANX says no restrictions apply to Fawry refunds. Ask your provider how the money reaches a shopper who paid cash at an outlet.

Our reference on refunds across local methods sets out windows and partial refund support method by method.

Worked example: what does moving COD orders to prepaid save?

Example figures, for illustration only.

An electronics store in Saudi Arabia ships 4,000 COD orders a month at an average of SAR 300. Its data shows 15% of COD orders refused or undelivered, against 2% of prepaid orders. The courier charges SAR 10 per collected COD order, outbound shipping is SAR 20 and return shipping SAR 25. Prepaid methods cost 2% of the order value.

Cost per 1,000 orders shipped	Cash on delivery	Prepaid
Orders delivered	850	980
COD fee or payment fee	SAR 8,500 (850 × 10)	SAR 6,000 (1,000 × 300 × 2%)
Outbound shipping on undelivered orders	SAR 3,000 (150 × 20)	SAR 400 (20 × 20)
Return shipping on undelivered orders	SAR 3,750 (150 × 25)	SAR 500 (20 × 25)
Total	SAR 15,250	SAR 6,900

Each 1,000 orders moved from COD to prepaid saves SAR 8,350 (15,250 minus 6,900). If a SAR 5 prepaid discount moves 30% of COD orders, 1,200 a month, the store saves SAR 10,020 in costs and spends SAR 6,000 on discounts, a net SAR 4,020 a month. It also delivers 156 more orders (1,176 instead of 1,020). A SAR 10 discount would cost SAR 12,000 and lose money on costs alone, so the size of the incentive matters as much as the idea.

What are the common mistakes?

• Using one regional COD figure. A 10% cash preference in the Gulf says nothing about Cairo. Set COD rules per market from your own refusal data.
• Removing COD overnight. Where shoppers still rely on cash, switching it off loses orders that prepaid will not recover. Limit it first, then measure.
• An incentive bigger than the saving. Calculate what a COD order costs you before offering a discount to avoid it.
• Hiding the COD fee until the door. In Saudi Arabia the law requires the total price, with all charges, before the order. Elsewhere it causes refusals anyway.
• Card-only prepaid. Without mada, KNET, Fawry or CliQ, shoppers who would pay online go back to cash.
• No refund plan for cash. Collect payout details with the return request, or refunds stall and become support tickets.

How does Omno help move shoppers from cash on delivery?

Omno does not collect cash or manage couriers; the merchant still runs COD with its delivery partners. What Omno can run is the prepaid side: one API in front of several providers, a hosted checkout with cards, local methods and crypto where the merchant decides which methods appear first, and routing rules by country, method, currency and customer group. The final status of every payment arrives by webhook. The hosted checkout page covers the setup.