How many of you readers are still fond of dear old cash? Probably fewer and fewer, considering that digital payments via payment cards or smart payment systems have been growing steadily in recent years, aided by the development of eCommerce. In fact, cashless payment solutions are becoming increasingly familiar to consumers, especially those belonging to the younger generation: according to Adyen’s Cashless Report 2023, last year in Italy card payments reached 94 percent, while smart payments (apps, e-wallets and QR Code payments) 45 percent, up 16 percent on 2021.
Digital payments vs. cash payments
Still, Italy remains one of the few countries where cash on delivery payments-also known as Cash on Delivery or COD-continue to account for a not insignificant share. While more than nine out of ten consumers (i.e., 95 percent) now finalize their purchases both online and in-store by resorting to digital (the figure comes directly from a Research conducted by Klarna, a Swedish fintech company that provides online financial services), the remaining 5 percent are consumers who still prefer cash.
Sectors in which cash is most prevalent
Some sectors more than others seem to attract this mode of payment. In early 2021, fashion and jewelry saw an increase in cash payments for orders placed online. In the fashion sector in particular, cash accounted for 31.5 percent of the total, a full 7 percentage points higher than 2020; while in the jewelry sector coins and bills accounted for 30 percent of payments, 6 percent higher than 2020.
In essence, according to the analysis conducted by Qaplà, one out of every 6 packages in Italy is sent with cash on delivery.
Why cash is preferred
The main reason for this choice is easy to guess: many consumers still have not gained full confidence in digital payments, believing the risk of fraud is “just around the corner”. In other words, when in doubt, it is better to touch the goods first and pay in hard cash.
In light of this scenario, let us therefore come to the point. Are Cash on Delivery or COD, whatever you prefer to call it, and eCommerce Pickup Points a viable combination? In other words, is it possible to pay cash if you choose an alternative delivery method to Home Delivery? The answer is yes. Or at least part of it is. First, however, a necessary premise is necessary.
COD and eCommerce
In fact, the first element to take into account is the well-known and much-discussed cash cap set by Law (which we recall is set at 4,999.99 euros as of January 1, 2023). Beyond this figure, therefore, there is no hope for cash on delivery.
Each logistics operator, then, can set its own ceiling for cash payment, providing or not for the signing of a specific contract. In the case of home delivery, then, the rules for cash payment depend on the logistics operator. For example, Poste Italiane stipulates that the letter carrier cannot collect cash amounts exceeding 258, 23 euros. Instead, for higher amounts, and still within the limit set by Law, it will be necessary to go to a post office to make the payment and then pick up the parcel.
COD and PUDO
Returning to the world of Out Of Home, however, we said that the answer is affirmative in part. Let us explain further. Paying for goods on delivery is possible, but still using digital payment systems. InPost, for example, provides several payment methods: PayByLink, that is, payment by bank transfer that, once registered, allows you to receive a pickup code with which you can pick up the parcel from the Parcel Locker; BLINK payment, that is, by entering a bank-generated code in the Locker following payment; Apple Pay and Google Pay; or, finally, the classic card payment in the app after the goods arrive in the locker but before they are actually picked up.
Amazon also offers its customers the option of paying in cash at the Store closest to the buyer within 48 hours of the order placed online, but shipping the order home, to a Locker or to a Collection Point – depending on the option chosen – takes place only once the payment is completed and confirmed. In the case of returns, then, a cash payment having been made, the refund will be issued in the form of a Gift Certificate.
Summing up, then, it is possible to pay in cash, but only before receiving the goods. An option that could prove optimal if the choice of cash is related to a lack of confidence in digital payments. Alternatively, it is possible to wait for the arrival of the parcel and then pay by digital method in order to make the pickup. Perfect solution in case the buyer’s doubts are not related to the payment method, but to the actual delivery of the purchased goods.
Finally, one last consideration is to be made regarding what to expect in the near future.
A look at payments of the future
According to data from the Innovative Payments Observatory of the School of Management of the Politecnico di Milano, digital payments via cards and smartphones are increasingly becoming part of Italian consumers’ everyday life, and the trends that are innovating the sector are manifold.
Indeed, 2022 saw the consolidation of Buy Now Pay Later – a mode already experienced by 13 percent of Italians for in-store and online purchases; a figure that will rise to 33 percent in the near future. In 2022, 2.3 billion euros were transacted with this service, 253% more than in 2021. 86% of the value was transacted online bringing the BNPL to 4% eCommerce penetration in Italy -; the launch of projects in Digital Wallet and Digital Identity at the European level; the development of the Open API paradigm; the entry of Soft POS into the acceptance market; the diffusion of new payment systems (cryptocurrencies and stablecoins); and, finally, new digital currency projects supported by central banks.
If you are an eCommerce manager and would like to integrate tens of thousands of already active Lockers and Pickup Points throughout the country and internationally to your online store, contact us! GEL Proximity is the sustainable alternative to Home Delivery you’ve been looking for.
