The core idea of ONDC is for sellers to sell anything to anyone online. And for buyers to buy anything from anyone using a single Application. Consumers can discover products across all sellers, and sellers can sign up into the ONDC network through a plug-and-play integration and be discovered without multiple sign-ups across different seller platforms.
As a buyer, how is this different from what I already do, if you might ask? For now, let’s say I use Amazon (and Amazon App); I can only order from the suppliers listed on Amazon and make use of payment options provided by Amazon and logistical partners employed by Amazon. If let’s say, the product I am searching for is unavailable on Amazon but is available through another seller platform (say Flipkart), I have to create another account on another App (Flipkart) to access the seller. With ONDC, All I have to do is search for a product, find the one I like, pay and receive it on the same platform, using a single App.
As a seller, say, a little-known artisan baker who wants to sell online will have to sign up with both seller platforms (Amazon and Flipkart) to be discovered by buyers. And the seller (artisan baker) will have to sign two separate contracts, integrate two payment methods and delivery options, and manage two different systems to take orders and fulfil them. It’s a hassle for sellers now, and it will be a hassle in the future being at the mercy of the terms dictated by the seller platforms.
As you can note, multiple onboarding processes across multiple seller platforms are tedious and inefficient. If the seller wants to switch from one seller platform to another (say from Amazon to Myntra), all of the goodwill earned from consumers is lost with the erstwhile switch. This is precisely what ONDC purports to solve. Sellers can plug into the ONDC network through any seller platform without the long-term lock-in with complete control of customer ownership and loyalty.
Of course, the devil is in the details. The arduous task of ONDC is to get all of the suppliers, payment partners, logistic partners, and perhaps even identity verification partners onto the ONDC network. While buyers have a choice, opportunities to fleece consumers by the sellers are plentiful all the same. There is an inherent trust when you buy from Amazon or Flipkart, knowing that the sellers on their platform have been vetted, your order arrives on time, and your money is safe. However, the same may not be true of a mom-and-pop shop two thousand miles away, sending you an artwork using a little-known seller platform and delivery partner on the network. Therefore, trust needs to be established within the network, and seller platforms onboarding businesses vet them thoroughly.
One core tenet of trust is ensuring that only legit businesses enter the ONDC platform in the first place. Much like Banks and Financial Advisors who onboard their customers through a stringent KYC check before customers go on to save and invest money legitimately, the businesses onboarding into the seller platform should comply with simple but stringent business verification checks. The basic premise is that ONDC will set the guidelines (in the absence of a regulator such as RBI/SEBI) to verify businesses coming on board the ONDC network (through the seller platforms). We recommend a simple and repeatable digital onboarding process for merchants and companies coming on board the ONDC network.
- The PAN of the business.
- The GST of the business.
- A cancelled cheque.
- A photo of the Authorised Signatory.
- E-Sign the contract.
The identity verification can be done seamlessly and in real-time using AI-powered technologies such as data extraction from documents, document verification against issuing authorities, bank verification using penny drop, and photo liveness checks. ONDC network aims to bring in 30 million sellers through the seller side platforms with over 300 million orders by 2024 (Source: ONDC strategy paper). Only a uniform merchant onboarding process and a repeatable verification process can enable ONDC’s ambitious plans to scale through the seller platforms and provide the trust needed by consumers.
Referring to the above figure, this is how we envisage a verified seller coming on board the ONDC network. A seller (or merchant) signs up with any seller application already on the ONDC network. The seller will receive a link triggered through the verification provider integrated by the seller application, which is also on the ONDC network. The secure link will direct the seller to follow the verification flow (Submit PAN, GST, Bank Cheque, Photo and eSign). The business verification and the audit trail are passed back to the seller platform, which will confirm the onboarding with the seller. All of this can happen in under a minute with a “verified seller” label added to the seller. The verification and active lookout for legitimate sellers can go a long way to building consumer trust.
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