ETDA’s Recommendation for an Online Merchant Management System with Cash on Delivery Service

The Electronic Development Transactions Agency (ETDA) has recently proposed a draft of ICT Standards for Electronic Transactions, specifically recommending guidelines for an online merchant management system that offers cash-on-delivery (COD) services. The purpose of this recommendation is to establish consistent practices for service providers in this field, addressing emerging challenges and mitigating potential risks associated with COD transactions. Ultimately, the goal is to enhance customer confidence and trust in the process of buying and selling products through COD.

The recommendation is structured into four main sections: scope, definition, introduction of COD, and conditions for online merchant delivery management services. Key points from each section are summarized as follows:

• Authentication of COD online merchant service providers are required to authenticate online merchants before allowing them to activate their services on the platform. This includes notifying the merchants about the authentication criteria and the information that needs to be collected, such as their names, identification numbers, and bank account numbers, to be in compliance with relevant laws.
• Online merchant delivery information must be maintained. Such information includes tracking numbers and recipient details. Additionally, any unusual behavior exhibited by online merchant service providers must be monitored.

• Provisions of recipient information on parcel cover sheets
  • Information on parcel cover sheets: service providers are obligated to include clear and visible information on the parcel cover sheets. This includes the service provider’s names, contact information, websites or communication channels, and details related to recipients’ support.
  • Information for assisting recipients: service providers must provide information on how the system assists recipients. This includes details on scenarios where the system can assist, channels for reporting problems, and any evidence that recipients may need to submit for investigation.
• Monitoring and addressing online merchant delivery behavior to prevent scams related to COD transactions: service providers must continuously monitor and track incidents involving online merchants. They should establish procedures for addressing suspicious behavior, which include the following steps:
  • Suspected scammers: if more than 10% of recipients report unexpected deliveries or parcels, they did not purchase from a specific merchant. In this case, the service providers must permanently terminate that merchant’s account.
  • Non-compliant items: if the items received by recipients do not meet the specifications as specified, service providers should notify the online merchants and request information to investigate and resolve the issue for both the merchants and the recipients.
  • Incident recording for future analysis: service providers are required to maintain records of incidents involving online merchant behaviors, which can be analyzed in the future for further insights.
  • Gathering evidence and reporting wrongdoings: if evidence related to scams or other wrongdoings is gathered, service providers should report the findings to the relevant authorities.

It is important to note that the above conditions and procedures are recommendations with no legal enforcement. They serve as guidance for service providers in the industry to establish best practices and maintain a high level of service quality and protection to the customers.

Author: Panisa Suwanmatajarn, Managing Partner.

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