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    ONDC May Start Levying Transaction Charges This Year: Report

    The Open Network for Digital Commerce (ONDC) is likely to begin levying transaction charges in the current financial year, reported the Business Standard. The fee will likely be small and must be paid by the buyer, seller or both, on each transaction. T Koshy, the Managing Director and CEO of ONDC, told Business Standard that the timing of the change will depend on market growth and readiness. 

    Why Is The Fee Needed?

    According to the report, the fee is mainly intended to allow ONDC to recoup its operating costs. While ONDC currently has no revenue model, its costs are low as it does not have a central platform or software that it needs to maintain. “We are a Section 8 company performing the role of a digital infrastructure provider. There is no central system or platform that we need to maintain. Thirdly, demand generation is a collaborative effort among the buyer app, seller app, sellers and ONDC. All these keep our costs minimalistic,” Koshy said. 

    ONDC is a digital project by the Indian government to develop an open UPI-like architecture for the e-commerce industry. The government-back network operates as a set of protocols intended to allow for a competitive digital marketplace where sellers can access new markets, and buyers can access more sellers and have more choices. It hopes to address market concentration and help small businesses become more competitive.

    The network has been growing rapidly since its inception in 2021 and clocked 5 million retail orders in May, an all-time high. It has also been integrating a wide range of goods and services onto the platform, with reports stating that ONDC plans to integrate consumer-facing apps like Tata Neu and PaisaBazaar to buff up its financial services offerings. E-commerce giant Flipkart is also planning to enter into food delivery through ONDC. It remains to be seen whether the transaction fees will affect business on the platform or not.

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    The post ONDC May Start Levying Transaction Charges This Year: Report appeared first on MEDIANAMA.

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