Buyers may be spared as ONDC plans charges to meet running cost

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The open network for digital commerce (ONDC) may not remain free for sellers for very long. There have been several questions over the business model of ONDC and its sustenance. ONDC’s chief buisness officer Shireesh Joshi said the company is planning two types of fees to meet its costs. One would be an annual registry fee for all network participants and the second a fee on all transations going through the network.

Currently ONDC is not charging aynthing from the sellers or the buyers. The burden of the registry and transaction fee may have to be borne by the sellers. For the buyers, the transactions may remain free.

Joshi, while addressing a workshop organised by National Restaurants Association of India, said the right now the company is sufficiently funded for several months and if need be more funds can be raised. But shareholder funds may not always be available. Eventually, the company needs to generate its own funds. He said ONDC was a not-for-profit organisation but  need to recover the costs and will remain a lean organisation.

How does ONDC work?

The ONDC platform basically works at two ends, at one end is the seller and at the other end is the buyer. For example, on one hand companies like Gofrugal and Digiit host the seller side interface, while on the other side companies like Paytm host the buyer side. ONDC serves as an interface between the two. In today’s scenario, when a buyer wants to buy a headphone, the drill involves searching on different e-commerce apps or sites to get the cheapest deal.

If the buyer uses ONDC to open an app (let’s say this app is Paytm), and searches for headphones on it, the buyer will not only see sellers on Paytm but also on other apps. In fact, the search will also show a list of nearby Headphones stores. Apart from this, you also get the facility of interoperability on ONDC. This means you can order goods from one app and get it delivered from another app.