Malaysia Cash on Delivery: Is It Still Worth It For Ecommerce?

Cash on Delivery (COD) has long been a cornerstone of ecommerce in Malaysia. In this article, we’ll break down whether COD is still worth it for online sellers since 2025, how it impacts your profit margins and what alternatives you should consider. If you’re running an online store, understanding cash on delivery could make or break your growth strategy.

Yet in Malaysia, COD often comes with stigma. Many business owners see it as risky linked to high return rates, fake orders and cash handling headaches. Some even believe COD is outdated now that e-wallets, FPX and Buy Now Pay Later are booming. But the truth? COD is still deeply relevant in certain segments of Malaysian ecommerce.

If you ignore COD completely, you might lose out on 30–40% of potential buyers who still prefer to pay only when the product is in their hands. In this guide, I’ll show you the real pros and cons of cash on delivery in Malaysia and why it is still relevant in Malaysia.

“In Southeast Asia, domestic payments have consistently seen high growth, with alternative channels like cash on delivery still playing a significant role, especially in less banked segments of the population.”

— How Asia Buys and Pays, 2023 (Scribd Report)

What is Cash on Delivery (COD)?

At its simplest, cash on delivery (COD) is when the buyer pays for a product only when it arrives at their doorstep. Instead of paying upfront via card or e-wallet, the courier collects the payment in cash (sometimes QR Pay) and passes it back to the seller.

It’s popular with shoppers who don’t trust online payments, lack bank accounts or simply prefer to “see before they pay.” Courier companies like J&T Express, Pos Laju, Ninja Van and DHL eCommerce Malaysia all offer cash on delivery services, with varying COD charges applied per order.

Why Some Malaysians Still Choose COD

Despite the surge of FPX, e-wallets and Buy Now Pay Later services, cash on delivery (COD) continues to thrive in Malaysia. According to ParcelDaily (2024), COD still accounts for more than 40% of ecommerce orders nationwide, particularly in high-demand categories like fashion, beauty and gadgets. The question is, why do Malaysians still prefer it?

1. Trust over technology

First, trust plays a huge role. Many shoppers, especially when dealing with new or lesser-known online stores, are hesitant to pay upfront. COD gives them peace of mind because they only hand over money once the item is in their hands. 

2. Accessibility for all

Secondly, accessibility remains a barrier. According to PwC Malaysia (2024), citing Bank Negara Malaysia data, about 15% of the 23 million adult population in Malaysia are still unbanked, while another 40% are underbanked, with many concentrated in semi-urban and rural areas. For these customers, COD is often the only practical payment method.

3. Habit and convenience

Another reason is habit and convenience. Malaysian consumers are used to the flexibility of COD and many prefer it for small, everyday purchases where digital wallets or cards feel unnecessary. Today, COD has also evolved. Some couriers now pair it with QR Pay and e-wallet integrations, reducing the risks of handling physical cash while keeping the experience familiar.

4. Platform adoption keeps it alive

Finally, major ecommerce platforms like Shopee and Lazada still promote COD as a checkout option. This signals that demand remains strong and sellers who ignore COD risk losing out on a large segment of buyers who prioritize trust, accessibility and convenience.

Advantages of Using Cash on Delivery in Malaysia

1. Wider Customer Reach

Despite the rise of FPX, e-wallets and Buy Now Pay Later, not every Malaysian shopper has access to these payment methods. In fact, Bank Negara Malaysia data shows that over 15% of Malaysians remain unbanked, with most of them living in semi-urban and rural areas (RinggitPlus, 2025). 

Offering cash on delivery (COD) allows ecommerce sellers to tap into this underserved market segment. For businesses selling essentials, fashion or consumer goods, COD ensures no customer is left out due to digital barriers.

2. Trust Builder for New Brands

Malaysian shoppers are naturally cautious when dealing with unfamiliar online sellers. COD becomes a trust-building tool, especially for new or smaller ecommerce businesses without a strong brand reputation. 

Instead of worrying about scams or fake websites, buyers gain confidence knowing they only pay once the product is in their hands. This reassurance is often the difference between an abandoned cart and a completed purchase.

3. Boosts Conversion Rates

Checkout abandonment remains one of the biggest headaches in ecommerce. In 2024, the Baymard Institute reported that 70.19% of online carts are abandoned globally, with lack of trust in payment being a major reason (Shopify, 2024). 

In Malaysia, COD helps bridge that trust gap. By removing the upfront payment barrier, COD can increase checkout conversions by up to 30%, making it a powerful strategy to turn browsers into buyers.

Disadvantages of Cash on Delivery in Malaysia

1. High Return & Cancellation Rates

The downside of COD is commitment or the lack of it. When customers don’t have to prepay, they’re more likely to cancel at the doorstep or refuse the package. 

Industry insights show COD orders in Malaysia have 15–20% higher return rates compared to prepaid orders. For sellers, this translates to wasted time, higher operational costs and unsold stock coming back.

2. Extra Courier Charges

Unlike prepaid deliveries, cash on delivery charges include additional fees for collection and cash handling. Malaysian couriers such as J&T Express, Pos Laju and Ninja Van typically impose a COD surcharge of RM2 to RM7 per parcel on top of standard delivery rates. 

For businesses with thin margins, these extra fees can eat significantly into profits unless carefully managed or offset with higher product pricing.

3. Slower Cash Flow

In prepaid models, sellers receive money instantly at checkout. With COD, however, cash only reaches the seller after the courier completes delivery and settles the funds, sometimes taking days or even weeks, depending on the courier. This delay creates cash flow gaps, which can be particularly challenging for small businesses that rely on quick turnover to restock inventory or cover daily expenses.

“In Malaysia, consumers prioritize faster and more reliable delivery over promotions, discounts and pricing when selecting where to shop online.”

— KPMG & GS1 Asia-Pacific, “Navigating the future of seamless commerce in Asia-Pacific” report, 2024

Why MyParcel Asia is Your Best COD Partner

So, is cash on delivery still worth it for ecommerce in Malaysia? The answer is yes, but with caution. COD builds trust, expands your customer base and lifts sales, but it also comes with costs and risks. At MyParcel Asia, we recommend using COD as part of a hybrid payment strategy rather than relying on it fully.

We’ve seen firsthand how COD impacts ecommerce businesses in Malaysia. Sellers who rely 100% on COD struggle with margins and returns. But those who use COD strategically, alongside prepaid options get the best of both worlds.

When you work with MyParcel Asia, you don’t just get access to cash on delivery with J&T, Pos Laju and DHL but you also get transparent COD fees, automated settlements and multi-courier integration in one dashboard. That means faster, smarter and cheaper COD fulfillment than trying to manage it courier by courier. If you’re serious about scaling ecommerce in Malaysia, don’t let COD slow you down. Use MyParcel Asia to manage it smarter. Contact us today, and let’s turn your deliveries into an advantage, not a liability.