How does cash on delivery work?
The customer places the order without paying and the merchant ships it. The courier collects the amount at the door and remits the money later, usually in batches, to the merchant or to a payment provider. Shopify treats COD as a manual payment method: such orders are marked unpaid until the merchant records the payment. PayU’s documentation for its COD service, which supports RON, describes the courier transferring funds to PayU and the merchant sending a report for each batch. Orders stay pending until both arrive and are then captured.
Why does it matter?
For customers who distrust online payment or have no card that works online, it removes the risk of paying for goods that never arrive. It remains part of e-commerce in MENA, though it is shrinking. Checkout.com’s 2024 MENA report found that the preference for cash on delivery in the region fell from 41% in 2020 to 20% in 2023, and to as low as 10% in Saudi Arabia, the UAE and Kuwait.
What does it cost?
Refused parcels mean two shipping legs and no sale, cash takes time to come back from couriers, and every batch has to be reconciled. As an illustrative example: a store ships 1,000 COD orders a month at 300 dirhams each. If 15% are refused and each round trip costs 25 dirhams, refusals cost 3,750 dirhams in shipping, and the 255,000 dirhams collected arrives days or weeks after delivery. Refunds are harder too: PayU sends COD refunds by domestic bank transfer, so the merchant must collect the customer’s bank details.
Where does Omno use it?
Omno does not handle cash collection. It helps merchants move COD customers to prepaid methods: the hosted checkout shows cards and local methods such as wallets and bank transfers from connected PSPs, filtered by country, customer group and eligibility rules. Direct Links put local methods on the merchant’s own buttons or payment links, so a customer can pay before dispatch.