ONDC Explained: Open Network Economics, Seller Costs and Consumer Risk
Reviewed by CA Nikhil Gupta · Last reviewed 24 June 2026
1. Current position
ONDC is a network architecture rather than one conventional marketplace owning every customer interaction. Network participants perform different roles, and commercial terms, returns, delivery, grievance handling and settlement depend on the entities involved. Network participation is not a guarantee of seller quality or zero commission.
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2. How it works in practice
A transaction can involve a buyer application, seller application, seller, logistics provider and payment or settlement arrangements. Finance teams should reconcile order value, taxes, discounts, participant fees, logistics, refunds and settlement deductions. GMV is not the same as seller revenue or ONDC income.
A reliable decision separates the legal rule, the commercial contract and the actual cash flow. A regulatory permission does not guarantee suitability, and a product label does not override the substance of the transaction.
For the connected rule, example or next step, see Visa vs Mastercard: Network Economics, Cross-Border Growth and Payment Risk.
3. Key rules and measurement boundaries
| Item | Position | How to read it |
|---|---|---|
| Architecture | Open network with multiple participant roles | Not one vertically integrated marketplace |
| Seller economics | Fees may be distributed across participants | Compare total cost, not one commission |
| Consumer control | Identify seller, buyer app and logistics party | Responsibility can be split |
For the connected rule, example or next step, see Rupee Near â‚ą95: Import Costs, Travel Budgets and FX Risk.
4. Practical example
A restaurant receives a ₹1,000 order. The customer sees a discount, while the seller statement includes buyer-app promotion, seller-app fee, logistics and taxes. The restaurant should reconcile the net settlement to the invoice and identify who funded each discount. A headline “low commission” claim is incomplete without the full waterfall.
5. Action checklist
- Identify every network participant in the order.
- Compare all-in fees, logistics and discount funding.
- Test cancellation, return and refund workflows.
- Reconcile settlement reports to GST invoices and bank credits.
- For sellers, maintain catalogue, stock and service-level controls.
6. Evidence and document checklist
- Order record and participant identifiers.
- Invoice, tax and settlement statement.
- Fee and discount-funding agreement.
- Delivery proof and return/refund trail.
- Complaint ticket and participant response.
7. Common mistakes
- Calling GMV revenue.
- Assuming ONDC itself is the seller in every order.
- Comparing only headline commission.
- Ignoring who bears returns and promotional discounts.
8. Red flags
- Seller identity unclear.
- Refund promised without a ticket or accountable participant.
- Settlement deductions cannot be reconciled.
- Catalogue claims differ across buyer apps.
9. Complaint or escalation route
Use the buyer app’s and relevant participant’s complaint channel with the order reference. Consumer disputes may also use the appropriate consumer-protection route. Sellers should escalate settlement issues under their network-participant agreements.
10. FAQs
Is ONDC an e-commerce company like a conventional marketplace?
It is an open-network initiative with multiple participant roles rather than one platform performing every function.
Does ONDC guarantee low seller fees?
No. Sellers must compare the total fee and logistics waterfall across participants.
Who handles a refund?
The accountable participant depends on the order and network role; preserve the order and complaint trail.
Is transaction value the same as ONDC revenue?
No. Network transaction value and accounting revenue are different metrics.
11. Official sources
- ONDC official website
- ONDC — Seller information
- ONDC — Network participants
- ONDC — Contact and grievance information
Information date: 20 June 2026. Rates, thresholds, portal processes and live proceedings can change; use the linked official material for the transaction or filing date.
Frequently Asked Questions
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Banking, RBI & Payments
- Official starting point
- www.rbi.org.in