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Simpl Introduces Early Settlement For D2C Merchants To Reduce CoD Settlement Time By Up To 90 Per Cent

While over 60 per cent of all online orders in India are placed via CoD, the settlement time for these orders takes around 20 days on average from the date of transaction, impacting cash flows of D2C merchants and increasing working capital requirements

Simpl Introduces Early Settlement For D2C Merchants To Reduce CoD Settlement Time By Up To 90 Per Cent

Outlook Start-Up Desk

POSTED ON January 23, 2024 10:22 PM

Checkout network Simpl has introduced its newest business offering, 'Early Settlement' for Direct-to-Customer (D2C) merchants, aimed at reducing the settlement time for Cash on Delivery (CoD) orders by up to 90 per cent and improving daily sales by nearly 40 per cent. This assumes significance as CoD orders, which constitute nearly 60 per cent of all online orders, typically take 15-20 days for settlement at the merchant's end, thereby blocking cash flow and increasing merchants' working capital requirements.

Additionally, this new business offering also settles prepaid orders with merchants in the shortest time possible, thereby providing/giving merchants the ability to improve their cash flow with same-day settlement of both CoD and prepaid orders. Simpl's Early Settlement also offers settlements on all 365 days and its fully automated settlement system ensures timely and accurate payments to merchants, helping improve their cash flows and reconciliation.

Khanaz KA, CXO at Simpl, noted that the tardy pace of cash flow settlements from CoD transactions in India has been a persistent challenge for D2C merchants in India. This leads to ballooning of monthly unsettled cash for D2C merchants to $300 million, which leads to an increase in their working capital requirements. 

"With Simpl's Early Settlement, merchants will be able to reduce their CoD order settlement time by as much as 90 per cent and improve their average daily sales by nearly 40 per cent. In the first two months of its pilot stage, nearly two dozen D2C merchants have already adopted our newest business offering, in a testament to its efficacy in solving their cash flow concerns, which they can redeploy to further their business growth," he added.

Among the two dozen early adopters of Early Settlement, merchants such as Wabi Sabi, Frido and Italian Colony have witnessed a substantial upward shift in their sales, experiencing a 40 per cent increase after expanding their CoD capacity. Interestingly, women's luxury wear brand Wabi Sabi has recorded over 125 per cent improvement in sales within a month of adopting this Early Settlement.

The onboarding process for merchants to activate 'Early Settlement' takes approximately 15 minutes and the technology stack has been designed to ensure error-free execution without the need for any human intervention. Once the integration is completed, merchants can expect prompt and hassle-free settlements as a testament to the efficiency of our system. 

Simpl is also working on ensuring real-time settlements for COD transactions over the next few months to streamline the settlement process further. With Early Settlement, the company is expanding its offerings for merchants after 1-Tap Checkout, Pay After Delivery and Checkout Suite to improve conversions and reduce return to origin (RTO). 

Simpl has over 26,000 merchants on its network and has been working on strengthening its artificial intelligence (AI)-powered technology platform to power consumers' checkout journey seamlessly and help merchants improve their business. 

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