You have likely faced this scenario recently: You open Zomato or Swiggy, add your favorite Biryani to the cart, and scroll down to pay—only to find the “Cash on Delivery” (COD) option is either greyed out or comes with an extra ₹15-25 “Handling Fee.”
It’s not just you. In 2025, paying with cash for food delivery is becoming increasingly difficult.
While UPI transactions in India have crossed staggering records (over 15 billion transactions monthly), the humble cash note is fighting for survival in the gig economy. But is it truly dying, or just evolving?
Here is the deep dive into the future of food payments and why it’s getting harder to pay with paper.
The “RTO” Trap: Why Apps Hate Cash
To understand why apps are hiding the cash button, you have to understand one specific acronym that keeps food tech CEOs up at night: RTO (Return to Origin).
In the e-commerce world, COD orders are 3x more likely to be rejected than prepaid ones.
- The Scenario: A user orders food on a whim. 30 minutes later, they change their mind, fall asleep, or simply refuse to open the door.
- The Cost: If the user has already paid (Prepaid), they rarely cancel. If it’s COD, the restaurant wastes the food, and the app wastes the fuel.
- The 2025 Fix: To combat this, apps now use AI to score your “buying behavior.” If you have a history of cancellations, your COD option is automatically disabled.
The Rise of the “Convenience Fee”
In 2024 and 2025, we saw a major shift. COD is no longer a “right”; it is now a “premium service.”
Because handling cash is expensive (riders need to deposit it, carry change, and risk theft), apps have introduced Cash Handling Fees.
- Zomato & Swiggy: Often charge a nominal fee (₹5–₹25) for cash orders to cover the “risk” and operational friction.
- The Nudge: This fee is a psychological nudge designed to push you toward UPI, which is free and instant for them.
The Hybrid Future: “Pay on Delivery” (QR Codes)
Cash isn’t dying—but physical currency is. The biggest trend in 2025 is the “Pay on Delivery” hybrid model.
Instead of handing over a ₹500 note and waiting for the rider to fumble for ₹30 change, riders now carry a laminated QR code (or show one on their app).
- Benefit for You: You still get the security of not paying until the food arrives (the “Trust” factor).
- Benefit for Them: No cash handling, no change issues, and instant settlement.
This method satisfies the intent of COD (security) without the hassle of cash.
Where Cash is Still King: Tier 2 & Tier 3 Cities
While Bengaluru and Mumbai are going cashless, the story is different in Tier 2 and Tier 3 cities. According to 2025 retail reports, nearly 60% of orders in smaller towns are still paid via Cash on Delivery.
- Trust: In newer markets, users are still wary of “money getting stuck” in failed server transactions.
- Adoption: Until digital trust is 100%, apps cannot kill COD completely without losing half their market base in rural India.
Summary: Will COD Disappear?
No, but it will become harder to use. By 2026, expect COD to become a “Plan B” feature—available only to users with high trust scores or those willing to pay a premium fee.
- The Good News: You can still use it if you know where to look.
- The Solution: If you are tired of blocked COD options on major apps, check our guide on Food Delivery Apps That Accept Cash to find services that still welcome your currency notes.
