ONDC To Levy Fee Of INR 1.5 From Next Month

SUMMARY

The Open Network for Digital Commerce (ONDC) will charge INR 1.5 per transaction for orders above INR 250 starting January 1, 2025

The fee will be applicable to all seller network participants, including logistics providers and financial services companies

The move comes as ONDC looks to sustain its operations and make further investments in network infrastructure

Government-backed open network for digital commerce (ONDC) will start levying a fee of INR 1.5 for every transaction above INR 250 from January 1.

This comes six months after ONDC CEO T Koshy had indicated plans to introduce transaction charges to recoup operating costs.

According to a notification by the ONDC, the fee will be paid by seller network participants (SNPs), including both integrated and managed sellers, logistics service providers, and financial services entities like lenders, insurance companies and mutual fund providers operating on the network.

The fee will only apply to successful transactions above the INR 250 threshold where no returns or refunds are issued within the specified window. Orders that are cancelled before fulfillment or fall below the value threshold will be exempt from the fee.

“The fee will ensure that ONDC can continue providing reliable infrastructure services to the Network ecosystem, while adhering to its not-for-profit principles, and also make further investment into the ecosystem for sustained growth and innovation,” the notification added.

ONDC has outlined a structured payment process where seller network participants must declare their chargeable transactions by the 7th of each month, following which the network’s finance team will issue invoices by 15th.

Payments must be made within 10 calendar days of invoice issuance. For payment settlement, ONDC will only accept bank transfers to its designated account.

This development comes as ONDC has been rapidly expanding its network and service offerings. The network logged 14 Mn transactions in October 2024, marking a 200% year-on-year growth from 4.5 Mn transactions in October 2023.

In recent months, ONDC has made significant strides in its fintech foray, facilitating its first mutual fund transaction in October through a partnership with Nippon India Mutual Fund. The network also launched credit offerings in August, enabling six-minute loan disbursals through various buyer apps.

ONDC currently claims to have more than 6.38 Lakh sellers and service providers operating across 609 cities. In November, ONDC logged 14.5 million transactions. The introduction of the transaction fee structure appears to be a strategic move to ensure sustainable operations as the network continues to scale.