The verdict in three sentences
Cash on delivery (COD) still rules because it reassures, but it eats your margin: refusal up to 25%, 2% cash-handling fees and working capital locked for 14 days. Prepaid mobile money slashes refusal to 2% and frees your cash instantly. The winning play in 2026: keep COD as an option, but nudge to prepay with a 5% discount.
The comparative economics
COD isn't free: every refused parcel is a paid round trip and a product that comes back. Prepay carries a psychological cost (trust) but a far lower operational one.
| Criterion (2026 order of magnitude) | Cash on delivery | Prepaid mobile money |
|---|---|---|
| Refusal rate | 12 to 25% | 2% |
| Cash-handling fee | 2% of amount | 0% |
| Time to collect cash | 14 days | Immediate |
| Reconciliation risk | High | Low |
| Working capital tied up | Yes | No |
| MoMo collection fee | 0% | 1 to 1.5% |
Even with a 1.5% MoMo fee, prepay is more profitable as soon as COD refusal exceeds ~5%, which it almost always does.
The prepay discount lever
Rather than banning COD (and losing wary buyers), make it pricier than prepay. A 5% discount on early payment mechanically shifts a share of orders.
| Scenario on 1,000 orders of FCFA 20,000 | 100% COD | With 5% prepay discount |
|---|---|---|
| Prepaid share | 0% | 30% |
| Refused orders | 180 (18%) | 128 |
| Refusal cost (FCFA 1,500/run) | FCFA 270,000 | FCFA 192,000 |
| Cash-handling cost (2%) | FCFA 400,000 | FCFA 280,000 |
| Discount cost (5% on 300 orders) | FCFA 0 | FCFA 300,000 |
| Working capital freed | No | FCFA 6,000,000 sooner |
The discount costs FCFA 300,000 but unlocks FCFA 6 million in cash and cuts refusals and cash fees: over a cycle, the move is clearly positive.
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Mini case study
Ibrahim sells phone accessories in Bouake, 1,000 orders/month at FCFA 20,000. On full COD he suffers 18% refusal (180 parcels) and 2% cash fees, or FCFA 670,000/month in combined costs. He launches a 5% prepay discount. Result: 30% of buyers switch, refusals fall to 12.8% and cash fees drop. His total combined cost (refusals + cash + discount) becomes FCFA 772,000, but he collects FCFA 6 million 14 days sooner, letting him restock without supplier credit: the cash-flow gain outweighs the apparent extra cost.
FAQ
Should I drop COD entirely? No. In a market where trust is still being built, removing COD can cost more sales than it saves. Keep it as a pricier option.
Why is COD refusal so high? Buyer absent, regretted impulse purchase, no cash at delivery time. Prepay removes all three causes, hence 2% refusal.
Doesn't the 5% discount eat margin? It protects it: 5% off on 30% of orders costs less than 18% refusals plus 2% cash fees across the whole volume.
Mobile money has fees too, right? Yes, 1 to 1.5% on collection depending on the operator, but far below the total cost of COD once refusal passes 5%.
How do I manage cash reconciliation? A dashboard that matches each delivery, its payment method and the rider's cash collected. That's where COD hides its losses.
Let's talk about your project. We set up dual COD/prepay checkout with automatic discount on your store. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
