How ONDC Will Impact Digital Payments in India

The Open Network for Digital Commerce (ONDC) is a government-backed network that lets buyer apps and seller apps trade with each other without sitting inside one marketplace. For digital payments, it mostly changes where the payment starts and who collects the fee, while UPI stays the main way you pay. How ONDC will impact digital payments in India depends on three groups: buyers, sellers and payment apps.

This guide explains each role in plain language, shows an illustrative cost comparison for a small seller, and lists what to check before you pay or sell on the network.

What Is ONDC and How Does It Work?

ONDC is an open network for online buying and selling. A buyer can use one app, a seller can list through another app, and both can still complete an order, because the apps follow shared rules for catalogues, orders and payments. Think of it as the way email works across providers, applied to shopping.

ONDC is a government-backed initiative aimed at reducing dependence on single digital marketplaces. For official announcements about the network, you can search the Press Information Bureau releases, which carry statements from the Government of India.

The key idea is separation. In a closed marketplace, one company runs the app you browse, the seller listings, the checkout and the payment step. On an open network, those layers can be run by different participants. That separation is what changes the payment picture.

Who Are the Main Participants on an Open Commerce Network?

There are three roles you should know. A buyer app is where you browse and place an order. A seller app is where a business manages its catalogue, orders and stock. A payment layer moves the money, usually through UPI, and records who is owed what.

Participant	What it does	Payment relevance
Buyer	Searches, orders and pays	Chooses the payment method, most often UPI
Buyer app	Shows products from many sellers	Starts the payment request and shows the receipt
Seller	Lists products and ships orders	Needs the money to reach a bank account on time
Seller app	Manages catalogue and orders for the seller	Tracks which orders are paid and which are pending
Payment app or bank	Authorises and moves the money	Runs the UPI or card step and sends confirmation
Logistics provider	Delivers the order	May affect when payment is released or refunded

Because these roles can belong to different companies, a single order can involve more than one party’s terms. That is useful for choice, and it also means you should know who to contact when something goes wrong.

What Role Does UPI Play in ONDC Payments?

Unified Payments Interface (UPI) is the instant payment system run by the National Payments Corporation of India (NPCI), and it is the payment method most closely tied to ONDC. ONDC is expected to drive adoption of interoperable payments, primarily through UPI. For the system itself, the NPCI website is the primary source.

UPI fits an open network because it already works across apps. You can pay a merchant from any UPI app, whichever bank account sits behind it. If you want the basics first, BillCut has a guide on how UPI works and what it changed in India.

What ONDC adds is the shopping layer on top. You are not tied to one app’s wallet or one app’s checkout. You choose the buyer app you prefer, and the payment still travels over the same UPI rails you already use.

There is a limit worth stating. ONDC does not replace UPI, cards or bank transfers, and it does not set payment rules for the banking system. The Reserve Bank of India (RBI) regulates payments in India, and its official website is where payment regulations are published.

How Does ONDC Change Payments for Buyers?

For buyers, ONDC mainly changes choice and visibility. You can compare sellers across apps, and you can often pay with the UPI app you already use. Each buyer app decides which payment options it offers, so the list can differ from one app to another.

The main consumer benefits usually cited are greater choice of sellers, ease of payment across platforms and transparent pricing. Each of these comes with a cost or limit.

• More sellers means more variation in quality, delivery time and return terms, so read the seller’s policy before you pay.
• Payment options depend on the buyer app, so a method you prefer may not appear everywhere.
• A refund may pass through more than one party, which can make it slower to trace than a single-marketplace refund.
• New apps and new sellers are an attractive target for fake payment requests.

On that last point, never approve a UPI collect request you did not start, and never share your UPI PIN with anyone. You enter a PIN only to send money, never to receive it. If you lose money to fraud, the National Cyber Crime Reporting Portal is where you report it, and the helpline number is 1930.

How Does ONDC Change Payments for Sellers and Small Merchants?

For sellers, ONDC mainly changes who you depend on for orders and what you pay to get them. A small merchant can list through a seller app and receive orders from several buyer apps, instead of building a following inside one marketplace.

The merchant benefits usually cited are reduced marketplace fees and broader reach. Whether your fees fall depends on the seller app you use, the buyer apps that send orders, and the payment charges that apply. Fees are set by the participants, not by this article, so ask each provider for a written fee list.

If you run a small shop, BillCut has a separate guide on digital payments for small merchants. For counter sales, a QR code payment setup works the same way with or without ONDC.

How Does Settlement Work When Many Apps Are Involved?

Settlement is the step where the money from a paid order reaches the seller’s bank account. In a closed marketplace, one company usually handles it. On an open network, the buyer app, the seller app and the payment provider may each play a part, so the timing and the deductions depend on the agreements between them.

Treat any settlement period you are quoted as a term to confirm in writing, not a given. Before you sign up with a seller app, ask these questions in writing.

1. How many days after delivery is the payment credited to my bank account?
2. What is deducted before I am paid, and is each deduction a flat amount or a percentage?
3. What happens to the payment if the buyer returns the order?
4. Who handles a dispute if the buyer says the payment was made but I say it was not received?
5. Where do I see a statement that matches each order to each credit?

Keeping every order, payment reference and refund in one record helps you reconcile your books. It also gives you evidence if a dispute arises.

Is an Open Network Cheaper Than a Single Marketplace?

It can be, but it is not guaranteed. The table below compares the two models on the factors that affect a seller’s total cost and cash flow. The comparison describes how each model is structured, not a promised outcome.

Factor	Single closed marketplace	Open network such as ONDC
Who sets the fees	One company	Each participant, by agreement
Where orders come from	One app	Several buyer apps
Payment method for the buyer	Set by the marketplace	Set by each buyer app, often UPI
Settlement timing	One policy	Depends on the parties involved
Dispute contact	One support team	Possibly more than one party
Risk to the seller	Dependence on one company	More choice, but more terms to manage

The honest summary is a trade. An open network can reduce dependence on one company, and it asks you to manage more relationships. Whether the trade is worth it depends on your product, your volume and how organised your records are.

What Could a Fee Difference Look Like for a Small Seller?

A simple example shows why fee structure matters. The figures below are illustrative assumptions, not actual rates charged by any marketplace, seller app or payment provider.

Assume a seller makes Rs 2,00,000 of sales in a month. In Scenario A, total fees are 15 percent of sales. In Scenario B, total fees are 8 percent of sales.

Item	Scenario A (15 percent)	Scenario B (8 percent)
Monthly sales	Rs 2,00,000	Rs 2,00,000
Fee rate	15 percent	8 percent
Fees paid	Rs 30,000	Rs 16,000
Amount received	Rs 1,70,000	Rs 1,84,000

The arithmetic: 15 percent of Rs 2,00,000 is Rs 30,000, so the seller keeps Rs 1,70,000. 8 percent of Rs 2,00,000 is Rs 16,000, so the seller keeps Rs 1,84,000. The difference is Rs 14,000 a month, which is Rs 1,68,000 over twelve months at the same sales.

The difference only holds if sales volume stays the same. A lower fee on a network with fewer orders can leave a seller worse off than a higher fee on a busy platform. Compare total rupees received, not only the fee rate.

What Happens If You Pay for an Order With a Credit Card?

Many buyers pay for larger purchases with a credit card, and the cost of that choice has nothing to do with ONDC. It depends on whether you clear the full statement amount by the due date. Each buyer app decides which payment methods it accepts, so check the checkout screen to see whether cards are offered.

The rules for card billing, statements and complaints are in the RBI’s Master Direction on credit card and debit card issuance and conduct. Your card issuer’s own terms set the interest rate you pay on an unpaid balance.

Here is an illustrative example. Assume you carry a Rs 10,000 order balance and your card charges 3 percent a month on the unpaid amount. That is Rs 300 in interest for one month. If you pay nothing towards the principal for three months, interest alone is Rs 900, before any late fee. These are assumed figures, so use your own statement for the real rate.

The point is simple. A discount on a seller’s price can be wiped out by a few months of card interest. If you cannot clear a purchase in full, consider a cheaper payment method for it.

If card balances from online orders are already building up, you can look at your options for lowering the interest on them. See how BillCut helps you refinance credit card debt.

What Are the Risks and Challenges of ONDC Payments?

Three challenges stand out: cybersecurity and data privacy, educating small merchants, and building consumer trust. Each affects payments directly.

• Fraud risk: fake payment links and fake collect requests can appear on any network. Learn how tokenization protects card payments and why that matters when you save card details in an app.
• Merchant readiness: a seller who has never managed digital orders needs training on records, returns and reconciliation.
• Trust: a buyer who has a problem with one seller needs a clear route to a resolution, and that route may involve more than one party.
• Held payments: when a buyer pays and the seller has not shipped, the money has to sit somewhere. A guide to digital escrow services in India explains one way that holding step can work.

If you have a complaint about a bank or a regulated payment provider that the provider does not resolve, the RBI’s ombudsman and consumer protection overview describes the next step. For a general complaint about a product or service, the National Consumer Helpline accepts complaints, and its toll-free number is 1915.

How Can BillCut Help If Online Spending Has Turned Into Card Debt?

BillCut is a debt refinancing platform, which means it is a provider in the category of solutions discussed in this section. It helps Indian borrowers convert high interest credit card debt into structured, lower interest EMIs. This matters here only for readers whose online purchases have ended up as an unpaid card balance.

The idea is to replace a balance that keeps growing with a fixed repayment plan. An EMI is an Equated Monthly Instalment, a fixed amount you pay each month for a set number of months. A fixed plan gives you a clear end date, which a revolving card balance does not.

There are costs and limits. Approval depends on your eligibility, and the interest rate and tenure you are offered depend on your profile, so you cannot assume a lower rate in advance. A longer tenure can lower the monthly amount while raising the total interest you pay over time. Read the full terms, the processing fees and the total repayment amount before you accept anything.

BillCut is one option among several. You can also ask your card issuer about instalment conversion, or speak to your bank. Compare the total cost of each route, not only the monthly figure.

Who Should and Should Not Rely on ONDC for Payments?

ONDC suits some users better than others, and the right answer depends on your comfort with new apps and your need for dependable support.

Group	May suit you if	Think twice if
Buyers	You already use UPI and want to compare sellers across apps	You need guaranteed one-contact support for every order
Small sellers	You want orders from more than one source and can keep clean records	You cannot manage multiple fee terms or wait for uncertain settlement
Frequent card users	You pay the full statement every month	You tend to carry a balance, since interest can outweigh any saving
Newer digital users	You have someone to help you check payment requests	You are unsure how UPI collect requests work

If you are in the second column, nothing is wrong with you or the network. It only means you should take smaller steps first, such as a low value order, before you rely on it for a large one.

How Does the Wider Payments Picture Fit Together?

ONDC is one part of a larger set of payment systems. UPI handles instant account to account transfers. Cards handle credit and tap payments, and wallets hold stored value.

For cross country comparisons of payment habits, the Bank for International Settlements publishes payment statistics. That source is for international context only. For payment data about India, use the NPCI and the RBI, since they are the primary sources.

Adoption numbers for ONDC change often, so this guide does not quote one. The official announcements linked above are the place to look for the latest figures.

What Should You Check Before Your Next ONDC Order or Sale?

A short routine protects both sides of a transaction. Use it every time until it becomes habit.

1. Confirm the app name and the seller name before you pay, and pay only inside the app.
2. Check the payment amount on your UPI screen against your order total.
3. Save the order ID, the payment reference and the seller’s return policy.
4. If you are a seller, get the fee list and the settlement terms in writing.
5. If you pay by card, plan to clear the full statement amount by the due date.

The RBI also publishes financial education material for borrowers and consumers, which is a good place to learn how to protect your accounts.

Frequently Asked Questions