Once the backbone of Australian mail order and catalogue shopping, Cash on Delivery (COD) has been steadily nudged aside by a wave of digital payment innovations. Yet, as we move through 2025, COD is still offered by select retailers and couriers, appealing to a niche but persistent slice of the market. What’s driving this lingering loyalty to cash payments at the door? And how does COD stack up against the frictionless, tap-and-go world most Australians now inhabit?
The COD Model: A Quick Refresher
Cash on Delivery is exactly what it sounds like: a customer pays for their goods—usually in cash, occasionally by card—only when the goods are delivered to their door. The courier collects the payment and remits it to the seller. In Australia, this method was popularised in the pre-internet era, ensuring trust for buyers wary of sending money sight unseen.
- Trust factor: Payment is only made once the customer has the product in hand.
- Accessibility: Useful for those who lack access to credit cards or prefer not to use online payments.
- Popular sectors: Small retailers, some food delivery services, and rural supply chains.
Why Some Aussies Still Choose COD in 2025
Despite Australia’s rapid embrace of instant payments (thanks to the New Payments Platform and PayID), COD persists. Here’s why:
- Digital Divide: Not all Australians are on board with digital banking. In remote communities and among older demographics, internet access or digital literacy can be a barrier.
- Privacy and Security: Some shoppers distrust sharing card details online, especially after high-profile data breaches in recent years.
- Budget Control: Paying in cash can help people avoid overspending or credit card debt.
- Trust in Transactions: COD provides peace of mind for buyers wary of scams or non-delivery, which spiked during the early 2020s.
Recent ABS data suggests around 4% of online purchases in Australia were paid using COD or similar methods in late 2024—a small but not insignificant share, with higher concentrations in regional areas.
Risks and Drawbacks of Cash on Delivery
While COD has its defenders, the system is not without problems, especially as e-commerce grows more complex. Key challenges in 2025 include:
- Operational Costs: Handling and reconciling cash adds time and expense for retailers and delivery partners.
- Security Risks: Delivery drivers carrying cash are at higher risk of theft or robbery.
- Failed Deliveries: If a customer isn’t home or doesn’t have the right cash, deliveries are delayed or returned, increasing costs.
- Limited Integration: COD doesn’t mesh easily with automated inventory or instant payment systems now standard in many Australian businesses.
Several national couriers have reduced or eliminated COD services in metropolitan areas, citing efficiency and safety concerns. Australia Post still offers COD for certain parcels, but the fee structure and requirements are less competitive compared to digital alternatives.
The Future of COD: Transition or Transformation?
Policy developments and market trends in 2025 are shaping the fate of COD in Australia:
- Digital Wallet Growth: Tap-to-pay, BNPL (Buy Now Pay Later), and instant bank transfers are now the default for most online and in-person transactions.
- Regulatory Push: The Australian government’s 2025 Digital Economy Strategy continues to encourage cashless transactions, citing efficiency, anti-fraud, and tax compliance benefits.
- Retail Adaptation: Some small retailers and rural suppliers are hybridising COD, using mobile EFTPOS at the door instead of cash, or requiring partial prepayment online.
- Consumer Choice: For a subset of customers—particularly in areas with patchy digital infrastructure—COD remains a valued option, and some retailers retain it as a differentiator.
The upshot? While COD’s heyday is clearly past, it isn’t extinct. Its future in Australia will likely be hyper-local and tightly focused on customers for whom digital isn’t (yet) a universal solution.
Conclusion: Should You Use COD in 2025?
If you’re a consumer who values privacy, cash budgeting, or simply prefers to pay on receipt, COD can still be a practical, if increasingly niche, choice. For retailers, it’s worth weighing the administrative burden against potential sales lost by dropping the option entirely. As digital payments become more entrenched, expect to see COD offered only where it makes genuine sense—rural deliveries, high-value goods, or specific customer requests.
