ONDC Again Delays Network Fee Implementation

SUMMARY

The state-backed Open Network for Digital Commerce (ONDC) has again postponed its planned network fee for seller apps to take effect from July 1

The extension is intended to provide stakeholders with sufficient time to align their internal processes and ensure a seamless transition

Initially, the network planned to levy the fee from January 1, which was then postponed to April 1

The state-backed Open Network for Digital Commerce (ONDC) has again postponed its planned network fee for seller apps. The fee will now be collected from July 1.

The move follows the feedback from the network participants and other stakeholders on the implementation timeline for the three-month postponement.

“This extension is intended to provide stakeholders with sufficient time to align their internal processes and ensure a seamless transition,” the network said in its latest notification.

ET reported the development first.

Initially, the network planned to levy the fee from January 1, which was then postponed to April 1.

ONDC on December 3 had first announced that it would be levying a network fee of INR 1.50, exclusive of taxes, on seller apps for every successful transaction where the total transaction value exceeds INR 250 after discounts and taxes.

The current extension aims to provide stakeholders with sufficient time to align their internal processes and ensure a seamless transition to the fee regime.

This comes at the heart of media reports stating that National Restaurant Association of India (NRAI) had paused onboarding of partner restaurants on ONDC due to internal disagreements.

To which, NRAI and ONDC issued a joint statement clarifying their strategic partnership and calling recent reports of a rift to be “inaccurate and misleading.”

As of March, the government-backed network crossed the 200 Mn milestone over 2 years after starting operations in January 2023.

The network, which has been consistently positioning itself as the UPI moment for ecommerce, took 20 months to reach the 100 Mn transactions milestone, while it crossed the next 100 Mn transactions mark in the following six months.

To deepen the awareness of the network and to boost transactions, the ministry of micro, small and medium enterprises (MSME) partnered with ONDC to launch MSME Trade Enablement And Marketing (TEAM) by allocating INR 277.35 Cr in January.

This aimed at helping over 5 Lakh MSMEs with a special focus on women-led businesses get onboard the network.

Meanwhile, the network has also seen a few top level exits this year, which includes resignation of T Koshy, the managing director and chief executive, who stepped after a three-year stint. Prior to that, chief business officer Shireesh Joshi, who served the network for about three and half years, also quit in March.