Open Network for Digital Commerce (ONDC)
Source: Business Standard
GS II: Indian Economy
Overview
- News in Brief
- About ONDC
Why in the News?
Open Network for Digital Commerce (ONDC) is set to expand its services to include financial offerings, such as credit, insurance, investments, and gift cards.
- This move comes after the platform successfully ventured into sectors like food, grocery, fashion, travel, and electronics.
News in Brief
- Over 65 entities have shown interest in joining the network as either buyer and seller applications (lending institutions) or technology service providers.
- More than 20 entities have already begun their integration journey.
- Companies that have initiated integration directly or through technology service providers include Tata Digital, India Lends, Easy Pay, DMI Finance, Aditya Birla Finance, and Karnataka Bank.
Services Provided by Open Network for Digital Commerce
- 4 components of financial services:
- Credit
- Insurance
- Investments
- Gift cards
- In insurance, ONDC is starting off with three products
- Health insurance
- Marine insurance
- Motor insurance
- For mutual fund investments, ONDC is working with MF Utilities India to onboard asset management firms as seller applications
Open Network for Digital Commerce (ONDC)
- An effort called Open Network for Digital Commerce (ONDC) aims to advance open networks for all facets of the exchange of goods and services through digital or electronic networks.
- Open standards and open network protocols will be used by ONDC, which will be independent of any particular platform.
- As with the simple mail transfer protocol for email exchange, the hypertext transfer protocol for information exchange over the internet, and the unified payments interface for payments, the foundations of ONDC are to be open protocols for all aspects of the entire chain of activities in exchange of goods and services.
- These open protocols would be used for establishing public digital infrastructure in the form of open registries and open network gateways to enable the exchange of information between providers and consumers.
- Providers and customers might communicate information and conduct transactions through ONDC using any suitable application of their choosing.
- The present platform-centric approach of digital commerce, in which both the buyer and the seller must utilize the same platform or application in order to be visible online and conduct business, is outmoded by ONDC.
- Operations including cataloguing, inventory management, order management, and order fulfilment would be standardized via ONDC standards.
- Thus, rather than being constrained by certain platform-centric restrictions, small firms would be free to employ any ONDC-compatible apps.
- Small companies will have a variety of alternatives for how to conduct business and be found on the network thanks to this. Additionally, it would encourage people who are now not using digital methods to quickly embrace them.
- Consumers may expect ONDC to increase the accessibility and inclusivity of e-commerce. By using any suitable application or platform, customers may be able to find any vendor, item, or service, possibly expanding their range of options.
- The customers will be able to match demand with the closest supply.
- Additionally, this would allow customers to select the neighbourhood businesses they like.
- As a result, the ONDC would standardize processes, encourage the use of local suppliers, increase logistical efficiency, and improve value for customers.
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