Snapdeal enters strategic partnership with Yes Bank to smoothen financial supply chain

We are quite aware that delayed seller payments affect SMEs and micro-entrepreneurs’ businesses. One of the reasons that contribute largely to this delay is COD mode of payment.

As a solution for the same, Snapdeal has entered in a partnership with Yes Bank along with logistics company, Blue Dart.

The Basic Aim

As per this Economic Times news report, the primary aim of this alliance is ‘strategic interventions in the financial supply chains’.

Yes Bank’s banking product suite ‘Yes Transact’ will play a crucial role in this. It will equip the online marketplace leader to receive cash-on-delivery payments from BlueDart in a much faster and organized way. This way Snapdeal will be able to release seller payments swiftly.

According to this agreement, Snapdeal, Yes Bank, and Blue Dart will be integrated via Yes Transact for COD payments. Post the integration, Yes Bank will act as a collection banker and will handle Snapdeal’s cash payments collected by Blue Dart.

Streamlining COD payments

In spite of the rise of plastic money and incentives offered by etailers to encourage online payment, the fact remains that major ecommerce payments (60%) come through COD. This poses as a challenge for etailers as well as online sellers. Efforts are made to reduce COD with a long term view. But until that happens, streamlining COD like how Snapdeal is trying to do is the only solution.

Asit Oberoi, CEO of Yes Bank rightly stated, “The cash on delivery model is very important in the Indian e-commerce industry, and we are certain that our Yes Transact solution will bring in enhanced efficiencies offering significant value to the companies in managing their supply chain.”

Amit Choudhary, Senior VP – Corporate Finance at Snapdeal also identified that COD is the most preferred mode of payment.

He added, “The dominant mode of payment for a large portion of online customers continues to be cash on delivery, this in effect adds time to the payment cycles for sellers. With this partnership we are confident that we can improve payments cycles and help our sellers become more successful.