ONDC May Start Charging A Small Fee From Platforms In A Year

ONDC May Start Charging A Small Fee From Platforms Within A Year

SUMMARY

Inc42 previously reported a 1.5% transaction fee from both buyer and seller side of the players

ONDC will keep the commission capped at 3-5% at a later stage (for now, it is free)

Reports suggest that this is still 7 to 10 times less than the usual online-selling commission rate of 23% to 28% on other ecommerce platforms

The Open Network for Digital Commerce (ONDC), India’s open ecommerce protocol, is likely to start charging a ‘small fee’ from platforms. This fee will contribute towards the ‘maintenance and development’ of the network, said the non-profit protocol’s managing director T Koshy during the unveiling of the office headquarters in Delhi.

While he did not disclose the quantum of the fee, Inc42 previously reported a 1.5% transaction fee from both the buyer and seller side of the players.

According to industry sources, ONDC will keep the commission capped at 3-5% at a later stage (for now, it is free), pushing for a massive reduction in costs compared to what businesses have to pay now for selling their goods online. A Gofrugal report had estimated that this is 7 to 10 times less than the usual online-selling commission rate of 23% to 28% on the cart value.

In an interview, Koshy hinted that ONDC may begin charging the fee from participatory platforms within a year.

Speaking during the inauguration of ONDC’s first office and headquarters in Delhi NCR, Koshy said that the protocol presently has 26 partners on the network. Next week, it expects to onboard homegrown fintech startup PhonePe.

Another 125 platforms will join ONDC in the next two months, taking the number to 200 firms that are working on technical integration with ONDC. By the first quarter of the calendar year 2023, ONDC will have another 400 platforms (buyer side, sellers side and logistics partners at a paperwork stage.

Currently, players including IDFC Bank, Kotak, Paytm, Delhivery, Shiprocket, and Dunzo are live on the network.

In its pilot, by November 2022, ONDC had 21 active network participants and operated in 22 pin codes across Bengaluru. Besides Bengaluru, ONDC has also started rolling out its network in cities including Delhi-NCR, Lucknow, Cuttack, Coimbatore, Shillong, and more. It plans to have 900 Mn buyers and 1.2 Mn sellers on the network, and achieve a gross merchandise value (GMV) of $48 Bn in the next two years.