The ONDC is Now Open to B2B Transactions, But There Are Challenges Ahead

Sayan Dey

Sayan Dey

The Open Network for Digital Commerce, or ONDC, established in 2021, is a government-backed, non-profit entity. It was created with the purpose of providing a sense of equality to the rapidly growing digital commerce ecosystem in India. It was established primarily with the concept of enabling B2C transactions, but in recent times it also opened the door to B2B digital transactions.

While the process of ensuring safe B2C transactions was widely successful, the B2B segment came with its own challenges, some of which persist even now.

To begin with, there is a wide range of B2B payment portals operational within the country. Even if digital payments were enabled for the most used portals, there would still be quite a few that would not fall under the ONDC network. So, a large level of standardization was required.

Apps like Uber and Ola could easily be integrated into the process, and they were offered to join in at an early stage of the process. The government had thought by bringing in the giants under the ONDC umbrella, the smaller companies would follow suit. But, this was not working, either due to a lack of trust or simply because of the fact that companies had a set process that they did not want to deviate from.

Clearly, a different approach is required to solve these issues.

Different Priorities Across The Market

The B2B operations by ONDC began with a bunch of startups such as Kerala’s Rapidor, New Delhi-based SignCatch, and Noida-based Spice Money. The CEO of ONDC stated during the early months of 2023 that they were trying to standardize the digital payment process for these startups much like how UPI operates in the B2C sector.

Expanding into the mobility sector was another key step. But, as the expansion process continued, the different priorities of the various sectors became evident. Since the mindset of organizations and sectors are different, the needs of B2B buyers are also widely apart. So, creating the standardized system that ONDC planned for has not yet been possible for the platform.

What has further worked against the organization is the fact that they are trying to force their hand onto these startups. The government clearly wants to establish ONDC as the primary enforcer of digital commerce in India, but this is perhaps not possible at the moment. There have also been talks that companies who refuse to be under the ONDC umbrella will be denied the opportunity of digital commerce altogether.

Whether the government will now scrap the B2B leg of ONDC is yet to be seen, but as of 2023, it has not been as successful as the B2C segment. A level of innovative strategizing is required for this segment that ONDC has clearly not been able to deliver.