Food delivery platform Zomato has implemented a variable 'Pay on Delivery' fee for cash-on-delivery orders, with charges ranging from ₹5 to ₹20 across different transactions. According to IANS, the company is now levying 2% of the cart value, capped at ₹30 as a 'pay-on-delivery' fee, though the actual amount varies significantly across orders. This new structure, shown as a 'Pay on Delivery Fee' in the order bill, applies when customers choose to pay for their food order in cash at delivery. The fee is different from Zomato's platform fee, restaurant packaging charges, and GST, and is applicable only on orders where customers opt for cash payment on delivery. Customers who choose online payment don't have to pay this additional charge. The variation indicates the fee is not fixed and may be determined by order value, location, restaurant, customer profile, or other factors, though Zomato has not clarified the calculation method. Recent screenshots show the fee commonly at ₹5, though some customers have been billed ₹7 or as much as ₹20, with some able to avoid the charge by switching to online payment.
The introduction of this new convenience charge could significantly boost Zomato's daily revenue stream. As per multiple reports, if every order had a ₹5 charge, it would mean an additional revenue of ₹1.15-1.25 crore per day or about ₹420-456 crore annually for the company. This shows how even small charges can become substantial revenue streams at such a large scale, despite cash-on-delivery orders being only a fraction of Zomato's total orders. The company processes around 2.3-2.5 million food orders a day, making this fee strategy potentially substantial for the platform's overall monetisation. The move follows Zomato's August restructuring, which saw around 250 layoffs and consolidation of Customer Delight operations in Gurgaon, and recent layoffs of around 240 employees as it shut down customer support operations in Hyderabad. This revenue estimate represents an upper-bound figure since cash-on-delivery orders form only a fraction of total transactions.
Cash-on-delivery orders typically carry higher operational costs for delivery platforms, including cash handling, reconciliation and a greater risk of payment disputes or delivery refusals, compared to prepaid digital transactions. By introducing a targeted fee specifically for COD, Zomato appears to be addressing these underlying cost differentials directly, rather than raising fees uniformly across all payment types. This approach also aligns with a broader industry trend of nudging consumers toward digital payments, which are cheaper to process and settle at scale. The company justifies this 'convenience charge' as compensation for the additional operational processes and coordination required to facilitate cash transactions, creating a clear financial incentive for customers to choose digital payment methods. The company displays a message encouraging customers to pay online to avoid the additional charge, making the fee structure explicit in its pricing strategy.
In March, Zomato raised its platform fee by nearly 20% to ₹14.90 per order from ₹12.50 earlier, with the revised fee being levied on a pre-GST basis with the hike implemented pan-India. As per Moneycontrol, e-commerce and food delivery companies earn a substantial ₹3,500-4,000 crore annually from these small charges alone. Swiggy subsequently increased its platform fee by more than 17% to ₹17.58 per order from ₹14.99, with the company stating the revised levy would help maintain its platform operations. Unlike the platform fee, which applies irrespective of payment mode, Zomato's new levy is specifically linked to customers' decision to pay at delivery time, making COD orders more expensive while explicitly encouraging online payments. The company's platform fee was first reported in April 2023, with Swiggy testing a ₹2 charge before introducing its own platform fee.
The new fee comes as food delivery platforms increasingly experiment with different fee structures and monetisation models amid intensifying competition. Swiggy does not currently levy a separate fee on cash-on-delivery orders, creating a competitive advantage in this segment. India's food delivery market is experiencing a fresh wave of competition as more players look to challenge the dominance of established platforms with lower commissions and faster delivery models. Flipkart is piloting its food delivery service Eat In in Bengaluru, initially among employees, and is reportedly considering a 10%-11% commission on restaurant orders, potentially undercutting incumbents. Rapido's Ownly is expanding its food delivery push through formal launch in March 2026 after testing in parts of Bengaluru, while quick food delivery startup Swish raised $24 million in funding to expand its kitchen network and enter new cities. This strategy could help Zomato generate more revenue by monetizing the payment method itself, with small charges at checkout, as the company seeks to maintain its competitive position in the evolving food delivery landscape.
