The Open Network for Digital Commerce (ONDC) is revolutionizing the digital commerce landscape by creating an inclusive ecosystem for buyers and sellers. This comprehensive guide covers essential aspects of ONDC agreements and contracts, including the agreements between ONDC sellers and buyers, the Transaction Level Contract (TLC), and the governance structure.
It lays out the legal framework for transactions on the ONDC network between network participants and helps to answer questions around governance & dispute resolution such as what to do if the order amount is not settled within the settlement period, or what needs to be done if a return package received by the seller is damaged, etc.
The Open Network for Digital Commerce (ONDC) is stirring up the digital commerce landscape by creating an open and inclusive ecosystem for buyers and sellers. As the platform continues to grow, network participants (sellers, seller apps and buyer apps) need to understand the agreements and contracts involved in the governance of the ONDC platform.
In the ONDC ecosystem, the agreements between ONDC seller network participants and ONDC buyer network participants are governed by the ONDC Network Policy . This policy outlines rules, standards, and protocols to ensure fair and transparent transactions on the ONDC platform.
These agreements facilitate seamless operations and interactions, ensuring all ONDC sellers adhere to consistent practices. The ONDC Network Policy is crucial for ONDC seller registration, guiding the integration process and maintaining operational integrity across the network.
A Transaction Level Contract (TLC) is a digital agreement that outlines the specific terms and conditions of a transaction between ONDC seller and buyer network participants (NPs) on the ONDC.
This agreement is essential for ensuring that all parties involved in a transaction have a clear understanding of their obligations and rights. For ONDC sellers, having a TLC in place is a critical aspect of ONDC integration, as it ensures that transactions are conducted under well-defined and mutually agreed-upon terms.
The TLC covers various elements such as price, payment terms, shipping costs, and logistics arrangements.
The primary purpose of a TLC is to ensure transparent and accountable transactions between NPs on the ONDC platform. It serves as a binding contract that specifies the details of the transaction, including commercial terms, delivery conditions, and settlement terms.
By providing clear and precise terms, the TLC helps reduce the risk of disputes between ONDC buyers and ONDC sellers. For ONDC sellers, this means having a reliable framework that supports fair trade practices and improves trust among all participants.
The TLC is integral to the ONDC integration process, as it standardizes transaction protocols and promotes consistency across the network, facilitating efficient and effective commerce.
A Transaction Level Contract (TLC) includes detailed commercial terms that define the financial aspects of a transaction between ONDC buyer and seller NPs. These terms cover the price of goods or services, settlement terms , buyer finder fees, shipping costs, and logistics arrangements.
By clearly specifying these elements, the TLC ensures that both parties have a mutual understanding of the transaction’s financial details. This clarity is particularly beneficial for ONDC sellers, as it minimizes the risk of misunderstandings and disputes.
On the ONDC platform, the APIs share details about product cataloging, order management, inventory status, and fulfillment processes. Therefore, sellers must provide accurate product descriptions, pricing, stock levels, and fulfillment timelines.
In TLC, settlement terms define the settlement windows and reconciliation frameworks essential for a smooth financial transaction process. These terms specify the timelines within which payments need to be made and received, ensuring that both ONDC buyer and seller NPs are aware of their financial obligations.
In the ONDC platform, settlement terms involve several key pieces of information exchanged between parties to ensure smooth transactions. The primary details include:
Transaction Details: Information about the order, including the items, quantities, and prices.
Payment Information: Details of the payment, including methods used (e.g., cash on delivery, digital payment).
Settlement Terms: The contractual agreement on how funds are to be distributed among the involved Network Participants (NPs), such as the buyer, seller, and logistics providers.
Reconciliation Information: Data required for reconciling payments and ensuring that all parties receive their due amounts.
Refund and Cancellation Policies: Terms agreed upon regarding refunds and cancellations, ensuring transparency and trust among participants.
A crucial aspect of the TLC is the return policies. These terms outline the conditions under which a product can be returned or refunded, providing a clear framework for post-purchase processes.
The ONDC platform ensures that return and refund policies are communicated between Network Participants (NPs). Sellers must specify their return policies, which include the conditions under which returns are accepted, time frames for returns, and the process for refunds.
>These policies are standardized across the ONDC network to ensure consistency and transparency for consumers using the ONDC shopping app. Additionally, sellers need to adhere to these policies to maintain trust and compliance within the network.
In the ONDC framework, the Transaction-Level Contract (TLC) details and associated data are primarily stored by the respective Buyer and Seller Network Participants (NPs). This ensures that both parties retain records of their agreements and transactions.
The ONDC platform does not centrally store this data but facilitates its exchange and proper handling among the involved NPs. For sellers using the ONDC platform and ONDC shopping app, their data, including TLC details, are typically managed through their specific Seller NPs, while Buyer NPs handle the corresponding buyer data.
This decentralized approach ensures that data is secure and managed in compliance with privacy policies and relevant regulations.
If a Buyer App violates the Transaction-level Contract (TLC) on the ONDC platform, there are specific consequences and procedures to address the breach. ONDC's Issue & Grievance Management (IGM) framework handles such violations. The framework categorizes issues into those between buyers and sellers or other Network Participants (NPs), and disputes involving two NPs.
When a violation occurs, it is reported through the respective apps, and the responsible NP works towards a resolution. If the issue remains unresolved, it can escalate to Online Dispute Resolution (ODR), which includes conciliation, mediation, and arbitration.
Sellers on the ONDC platform are advised to ensure their products and services meet all applicable standards and regulations to protect their interests. ONDC offers a framework that promotes transparency, fair competition, and the protection of seller rights.
Sellers are also provided with resources and support to address any disputes that may arise, fostering a secure and reliable environment for their businesses. Additionally, ONDC's protocols ensure that sellers are safeguarded against unfair practices, and there are mechanisms in place for grievance redressal to handle any issues efficiently.
The Issue and Governance Management (IGM) system within the ONDC platform handles dispute redressal in three phases:
1. Internal Resolution by Network Participant (NP): Issues are initially handled by the NP's internal mechanisms, such as automated solutions or customer service. Resolution should be offered within 24 hours. Unresolved issues escalate to grievances.
2. Grievance Redressal Officers (GRO): If the issue remains unresolved, it is escalated to the GRO of the relevant NP. The GROs assess and resolve the grievance within 7 days. If no NP takes responsibility, the grievance escalates to a dispute.
3. Online Dispute Resolution (ODR): Disputes are managed by ODR service providers, offering mediation, conciliation, or arbitration. If still unresolved, legal action may be pursued.
This system ensures timely and efficient resolution, fostering trust among participants on the ONDC platform and ONDC shopping app.
Key aspects of the ONDC Network Policy for sellers include ensuring compliance with network standards, maintaining accurate product listings, and adhering to fair pricing and return policies. Sellers must digitize their catalogs, manage payments, and fulfill orders effectively.
They are also responsible for providing a positive buying experience and training in the best eCommerce practices. Sellers should also be aware of the dispute resolution mechanisms in place to address any grievances and ensure smooth operations on the ONDC platform.
These policies are designed to create a level playing field, enhance trust among network participants, and provide consumers with a reliable shopping experience on the ONDC platform and ONDC shopping app.
To become a Network Participant on the ONDC platform, sellers must meet specific eligibility criteria and undergo a thorough onboarding process. This process ensures only qualified and compliant sellers can participate in the network maintaining a high standard of integrity and reliability.
The ONDC seller registration process involves verifying the seller’s credentials, business practices, and adherence to the ONDC Network Policy. This rigorous onboarding ensures that all ONDC sellers are well-prepared to engage in digital commerce, fostering a trustworthy and efficient marketplace.
Operational compliance within the ONDC platform is crucial to ensure smooth and efficient functioning. Key aspects include adherence to the technical standards and specifications set by ONDC, ensuring that all network participants follow standardized protocols for interoperability.
Compliance also involves maintaining data security and privacy as per the regulations, conducting regular audits, and providing necessary training to network participants. Furthermore, ONDC has established a robust framework for monitoring and evaluating performance, which includes mechanisms for dispute resolution and continuous improvement of service quality.
These measures are designed to ensure that sellers and buyers on the ONDC platform and ONDC shopping app can engage in transactions securely and efficiently, fostering a trustworthy digital commerce environment.
The Scoring and Badging System provides a consolidated rating for Buyers and Sellers on the ONDC network. This system helps participants make informed business decisions by displaying the reputation of relevant parties.
Understanding and adhering to ONDC agreements and contracts is crucial for sellers on the ONDC platform. By comprehending the nuances of the Transaction Level Contract, governance, compliance, and dispute resolution mechanisms, sellers can ensure smooth and transparent operations within the ONDC ecosystem.
If you want to be part of the ONDC network and be a Network Participant on the platform, then get in touch with our team
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