ONDC contemplates user charges amid rapid expansion: Report

Since its full-scale rollout across India, ONDC has successfully onboarded over 500,000 sellers, with a significant portion being small or medium-sized enterprises.

In a recent development, the government-backed Open Network for Digital Commerce (ONDC) is contemplating the introduction of user charges during the current fiscal year, according to a report by Business Standard.

The exact amount of these charges is yet to be determined but is expected to be nominal, and applied to each transaction on the platform.

Moneycontrol couldn't independently verify the report.

The decision on who will bear these charges—whether sellers, buyers, or both—is still under consideration. Speaking to Business Standard, T Koshy, the Managing Director and CEO of ONDC, emphasized that the timing and structure of these charges will depend on the growth and readiness of the network.

ONDC, initiated by the government’s Department for Promotion of Industry and Internal Trade, operates as a non-profit entity aimed at facilitating electronic transactions for goods and services through an open network.

The platform aims to enhance visibility for products, increase revenues for sellers, and provide expanded choices for buyers. Notably, it accommodates sellers of all sizes, particularly targeting small and local businesses new to digital platforms.

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Currently, ONDC operates without a revenue model, keeping costs low by focusing solely on digital infrastructure provision. Koshy clarified that ONDC functions akin to a utility service, comparable to the Unified Payments Interface (UPI), where operational costs are inevitable and must be managed.

Since its full-scale rollout across India, ONDC has successfully onboarded over 5 lakh sellers, with a significant portion being small or medium-sized enterprises. The platform has witnessed a notable increase in transactions, handling approximately 9 million transactions in May alone, a significant rise from previous months.

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Several prominent entities, including startups and high-growth businesses such as Zerodha, EaseMyTrip, and Cars24, have expressed preliminary interest in joining the network, highlighting its growing influence in the digital commerce ecosystem.

The introduction of user charges by ONDC, once finalized, aims solely to cover operational costs, aligning with similar models observed in utility-based digital platforms like UPI. The decision reflects ONDC's strategic approach to sustainability and expansion in India's burgeoning digital economy landscape.