Every founder we sit down with in Dubai or Riyadh eventually asks the same question: should we drop cash on delivery? The instinct makes sense. COD is expensive to run, it wrecks your cash flow forecasting, and a chunk of orders never get collected. The data seems to back the instinct up too — COD usage across the GCC has roughly halved over the past four years, from around 41% of transactions to about 20% today, as digital wallets and card payments have matured across the region.

So the logical move is to switch it off and push everyone to card or wallet. We think that's the wrong read of the data, and we've watched it cost stores real revenue.

The number everyone quotes, and the number nobody checks

The regional COD decline is real. In the UAE, COD now sits somewhere between 25% and 30% of e-commerce transactions, down from around 40% in 2022, while digital wallets have grown to cover close to 44% of UAE online payments. Saudi Arabia has moved even faster, with COD usage estimated at roughly 18% in 2026 after a decline of well over 60% since 2020.

What that regional average hides is who is still choosing COD, and why. It's disproportionately first-time buyers, shoppers on a brand's website rather than a marketplace they already trust, and customers buying above a certain order value where "what if it doesn't turn up" anxiety kicks in. Remove COD entirely and you're not trimming the fat — you're cutting off the exact segment that hasn't decided to trust you yet.

COD isn't a payment method. It's a trust bridge. Once a customer has ordered from you once and it arrived, they'll happily pay by card next time. The mistake is removing the bridge before they've crossed it.

What we actually see in the data when we run it store by store

When we audit checkout data for e-commerce clients across the UAE and Saudi, a pattern shows up almost every time: COD conversion on a customer's first order is meaningfully higher than card conversion on that same first order, and that gap disappears or reverses by the second or third purchase. The store that removes COD across the board isn't losing 20% of its revenue — it's losing a disproportionate share of new-customer revenue, which is the segment every founder is spending the most on acquisition to reach.

We saw this play out with a homeware brand we worked with in Dubai. They switched off COD site-wide to reduce delivery-fleet cash handling. Overall conversion held roughly steady because returning customers didn't care. But new-customer conversion from paid social — their single biggest acquisition channel — dropped by close to a third within six weeks. They were paying to bring cold traffic to a checkout that cold traffic didn't trust yet.

The framework: segment the payment mix, don't switch it off

The fix isn't reinstating COD everywhere. It's being deliberate about where it stays and where it goes.

1. Keep COD for first-time customers, cap it for everyone else

Most Shopify and Salla setups can flag first-time buyers at checkout. Offer COD to them freely. For returning customers, nudge toward card or wallet with a small incentive — free shipping, a discount code, faster delivery slot — rather than removing the option outright.

2. Set a COD ceiling by order value

High-ticket items are where COD abuse and failed collections hurt most. Cap COD eligibility at a threshold — say, AED 500 or SAR 500 — and route anything above that to prepaid or BNPL. This protects margin on the orders that actually move the needle financially, while keeping the trust bridge open for lower-risk impulse and first purchases.

3. Make BNPL the real alternative, not just "pay now"

Buy-now-pay-later has grown fast in the UAE and Saudi precisely because it offers something COD offers emotionally — reduced risk — without the operational cost. If you're going to actively push customers away from COD, BNPL is a far more effective landing spot than a flat card-only checkout, because it preserves the psychological safety net.

4. Treat India and Africa-facing stores differently

For Purple & Co clients selling into India or parts of Africa alongside the GCC, this whole calculation shifts. COD still dominates a much larger share of transactions in both markets, and digital payment infrastructure trust varies far more by city and platform. A one-size payment strategy across GCC, India and Africa storefronts is one of the more common and avoidable mistakes we see in multi-market Shopify setups.

The real question isn't "should we drop COD"

It's "who still needs it, and for how long." Treated as a blunt cost-cutting lever, removing cash on delivery trims your operations team's headache and quietly taxes your new-customer revenue at the same time. Treated as a segmented tool — first-time buyers, order-value thresholds, market-specific defaults — it does what it was always meant to do: get someone who doesn't trust you yet to place their first order.

The stores winning in GCC e-commerce right now aren't the ones with the cleanest checkout. They're the ones who understood that trust and payment method are the same decision, made twice — once by the customer, once by the store.

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