diff --git a/docs/COD-IMPLEMENTATION-PLAN.md b/docs/COD-IMPLEMENTATION-PLAN.md
new file mode 100644
index 0000000..1bf42ea
--- /dev/null
+++ b/docs/COD-IMPLEMENTATION-PLAN.md
@@ -0,0 +1,320 @@
+# Cash on Delivery (COD) Implementation Plan
+
+**Branch:** `feature/cash-on-delivery`  
+**Status:** In Development  
+**Created:** March 29, 2026  
+
+---
+
+## 1. ARCHITECTURE DECISIONS
+
+### Payment Method Type: Simple Transaction
+- Uses Saleor's native `Transaction` objects
+- No Payment App required (COD is manual payment)
+- Creates transaction with status `NOT_CHARGED`
+- Staff marks as paid via Dashboard when cash collected
+
+### Why This Approach:
+- ✅ Native Saleor data structures
+- ✅ Appears in Dashboard automatically
+- ✅ No metadata hacks
+- ✅ Extensible to other simple payments (Bank Transfer)
+- ✅ Compatible with Payment Apps later (Stripe, etc.)
+
+---
+
+## 2. FILE STRUCTURE
+
+```
+src/
+├── lib/
+│   ├── config/
+│   │   └── paymentMethods.ts          # Payment methods configuration
+│   └── saleor/
+│       └── payments/
+│           ├── types.ts                # Payment type definitions
+│           ├── cod.ts                  # COD-specific logic
+│           └── createTransaction.ts    # Generic transaction creator
+│
+├── components/
+│   └── payment/
+│       ├── PaymentMethodSelector.tsx   # Payment method selection UI
+│       ├── PaymentMethodCard.tsx       # Individual payment card
+│       └── CODInstructions.tsx         # COD-specific instructions
+│
+├── app/[locale]/checkout/
+│   ├── page.tsx                        # Updated checkout page
+│   └── components/
+│       └── PaymentSection.tsx          # Checkout payment section wrapper
+│
+└── i18n/messages/
+    ├── en.json                         # Payment translations
+    ├── sr.json                         # Payment translations
+    ├── de.json                         # Payment translations
+    └── fr.json                         # Payment translations
+```
+
+---
+
+## 3. DATA MODELS
+
+### PaymentMethod Interface
+```typescript
+interface PaymentMethod {
+  id: string;
+  name: string;
+  description: string;
+  type: 'simple' | 'app';
+  fee: number;
+  available: boolean;
+  availableInChannels: string[];
+  icon?: string;
+}
+```
+
+### COD Transaction Structure
+```typescript
+const codTransaction = {
+  name: "Cash on Delivery",
+  pspReference: `COD-${orderNumber}-${timestamp}`,
+  availableActions: ["CHARGE"],
+  amountAuthorized: { amount: 0, currency: "RSD" },
+  amountCharged: { amount: 0, currency: "RSD" }
+};
+```
+
+---
+
+## 4. IMPLEMENTATION PHASES
+
+### Phase 1: Configuration & Types (Files 1-3)
+**Files:**
+1. `lib/config/paymentMethods.ts` - Payment methods config
+2. `lib/saleor/payments/types.ts` - Type definitions
+3. `lib/saleor/payments/cod.ts` - COD transaction logic
+
+**Deliverables:**
+- [ ] Payment methods configuration
+- [ ] TypeScript interfaces
+- [ ] COD transaction creation function
+
+### Phase 2: UI Components (Files 4-6)
+**Files:**
+4. `components/payment/PaymentMethodCard.tsx`
+5. `components/payment/PaymentMethodSelector.tsx`
+6. `components/payment/CODInstructions.tsx`
+
+**Deliverables:**
+- [ ] Payment method selection UI
+- [ ] COD instructions component
+- [ ] Responsive design
+
+### Phase 3: Checkout Integration (Files 7-8)
+**Files:**
+7. `app/[locale]/checkout/components/PaymentSection.tsx`
+8. `app/[locale]/checkout/page.tsx` (updated)
+
+**Deliverables:**
+- [ ] Payment section in checkout
+- [ ] Integration with checkout flow
+- [ ] Transaction creation on complete
+
+### Phase 4: Translations (Files 9-12)
+**Files:**
+9-12. Update `i18n/messages/{en,sr,de,fr}.json`
+
+**Deliverables:**
+- [ ] All translation keys
+- [ ] Serbian, English, German, French
+
+### Phase 5: Testing
+**Tasks:**
+- [ ] Test COD flow end-to-end
+- [ ] Verify transaction created in Saleor
+- [ ] Test mobile responsiveness
+- [ ] Test locale switching
+
+---
+
+## 5. CHECKOUT FLOW
+
+```
+1. User adds items to cart
+   ↓
+2. User proceeds to checkout
+   ↓
+3. Checkout page loads with:
+   - Contact form (email, phone)
+   - Shipping address form
+   - Billing address form (same as shipping default)
+   - Shipping method selector
+   - PAYMENT METHOD SELECTOR (NEW)
+     └─ COD selected by default
+   - Order summary
+   - Complete Order button
+   ↓
+4. User fills all required fields
+   ↓
+5. User clicks "Complete Order"
+   ↓
+6. System:
+   a. Validates all fields
+   b. Creates order via checkoutComplete
+   c. Creates COD Transaction on order
+   d. Redirects to order confirmation
+   ↓
+7. Order Confirmation page shows:
+   - Order number
+   - Total amount
+   - Payment method: "Cash on Delivery"
+   - Instructions: "Please prepare cash for delivery"
+   ↓
+8. Staff sees order in Dashboard:
+   - Status: UNFULFILLED
+   - Payment Status: NOT_CHARGED
+   - Transaction: "Cash on Delivery (COD-123)"
+   ↓
+9. On delivery:
+   - Delivery person collects cash
+   - Staff marks order as FULFILLED in Dashboard
+   - (Optional: Create CHARGE_SUCCESS transaction event)
+```
+
+---
+
+## 6. SALESOR DASHBOARD VIEW
+
+### Order Details:
+```
+Order #1234
+├─ Status: UNFULFILLED
+├─ Payment Status: NOT_CHARGED
+├─ Transactions:
+│  └─ Cash on Delivery (COD-1234-1743214567890)
+│     ├─ Status: NOT_CHARGED
+│     ├─ Amount: 3,200 RSD
+│     └─ Available Actions: [CHARGE]
+└─ Actions: [Fulfill] [Cancel]
+```
+
+### When Cash Collected:
+```
+Staff clicks [Fulfill]
+  ↓
+Order Status: FULFILLED
+Payment Status: (still NOT_CHARGED, but order is complete)
+```
+
+---
+
+## 7. TRANSLATION KEYS
+
+### English (en.json):
+```json
+{
+  "Payment": {
+    "title": "Payment Method",
+    "cod": {
+      "name": "Cash on Delivery",
+      "description": "Pay when you receive your order",
+      "instructions": {
+        "title": "Payment Instructions",
+        "prepareCash": "Please prepare the exact amount in cash",
+        "inspectOrder": "You can inspect your order before paying",
+        "noFee": "No additional fee for cash on delivery"
+      }
+    },
+    "card": {
+      "name": "Credit Card",
+      "description": "Secure online payment",
+      "comingSoon": "Coming soon"
+    },
+    "selectMethod": "Select payment method",
+    "securePayment": "Secure payment processing"
+  }
+}
+```
+
+### Serbian (sr.json):
+```json
+{
+  "Payment": {
+    "title": "Način Plaćanja",
+    "cod": {
+      "name": "Plaćanje Pouzećem",
+      "description": "Platite kada primite porudžbinu",
+      "instructions": {
+        "title": "Uputstva za Plaćanje",
+        "prepareCash": "Pripremite tačan iznos u gotovini",
+        "inspectOrder": "Možete pregledati porudžbinu pre plaćanja",
+        "noFee": "Bez dodatne naknade za plaćanje pouzećem"
+      }
+    }
+  }
+}
+```
+
+---
+
+## 8. TESTING CHECKLIST
+
+### Functional Tests:
+- [ ] COD radio button selected by default
+- [ ] Payment section visible in checkout
+- [ ] Order completes with COD selected
+- [ ] Transaction created with correct details
+- [ ] Transaction visible in Saleor Dashboard
+- [ ] Order confirmation shows COD
+- [ ] Translations work in all locales
+
+### Edge Cases:
+- [ ] Checkout validation fails - payment method preserved
+- [ ] Network error during transaction creation
+- [ ] User switches payment methods (when multiple available)
+- [ ] Mobile viewport - payment section responsive
+
+### Integration Tests:
+- [ ] End-to-end COD flow
+- [ ] Order appears in Dashboard
+- [ ] Staff can fulfill COD order
+- [ ] Multiple payment methods display correctly
+
+---
+
+## 9. FUTURE ENHANCEMENTS
+
+### Phase 2 (Post-MVP):
+- [ ] Add Bank Transfer payment method
+- [ ] Payment method icons
+- [ ] Save payment preference for logged-in users
+
+### Phase 3 (Advanced):
+- [ ] Bitcoin (manual) payment method
+- [ ] Bitcoin (automated) via custom handler
+- [ ] Payment Apps integration (Stripe, etc.)
+
+---
+
+## 10. NOTES
+
+### Why No Metadata:
+- Saleor has native Transaction objects
+- Transactions are typed and validated
+- Appear in Dashboard automatically
+- Support proper lifecycle (NOT_CHARGED → CHARGED)
+
+### Why Simple Type (Not App):
+- COD doesn't need async processing
+- No external API to integrate
+- No PCI compliance requirements
+- Manual verification by staff
+
+### Compatibility:
+- Current architecture supports Payment Apps later
+- Can add Stripe/PayPal as `type: 'app'` without breaking COD
+- Bitcoin can be added as `type: 'async'` when ready
+
+---
+
+**Last Updated:** March 29, 2026  
+**Next Review:** After Phase 1 completion
\ No newline at end of file
diff --git a/src/app/[locale]/checkout/components/PaymentSection.tsx b/src/app/[locale]/checkout/components/PaymentSection.tsx
new file mode 100644
index 0000000..c54d11f
--- /dev/null
+++ b/src/app/[locale]/checkout/components/PaymentSection.tsx
@@ -0,0 +1,47 @@
+"use client";
+
+import { PaymentMethodSelector, CODInstructions } from "@/components/payment";
+import { getPaymentMethodsForChannel } from "@/lib/config/paymentMethods";
+import type { PaymentMethod } from "@/lib/saleor/payments/types";
+import { useTranslations } from "next-intl";
+
+interface PaymentSectionProps {
+  selectedMethodId: string;
+  onSelectMethod: (methodId: string) => void;
+  locale: string;
+  channel?: string;
+  disabled?: boolean;
+}
+
+export function PaymentSection({
+  selectedMethodId,
+  onSelectMethod,
+  locale,
+  channel = "default-channel",
+  disabled = false,
+}: PaymentSectionProps) {
+  const t = useTranslations("Payment");
+
+  // Get available payment methods for this channel
+  const paymentMethods: PaymentMethod[] = getPaymentMethodsForChannel(channel);
+
+  // Get the selected method details
+  const selectedMethod = paymentMethods.find((m) => m.id === selectedMethodId);
+
+  return (
+    <section className="border-t border-gray-200 pt-6">
+      <PaymentMethodSelector
+        methods={paymentMethods}
+        selectedMethodId={selectedMethodId}
+        onSelectMethod={onSelectMethod}
+        locale={locale}
+        disabled={disabled}
+      />
+
+      {/* Show COD instructions when COD is selected */}
+      {selectedMethod?.id === "cod" && (
+        <CODInstructions locale={locale} />
+      )}
+    </section>
+  );
+}
diff --git a/src/app/[locale]/checkout/page.tsx b/src/app/[locale]/checkout/page.tsx
index efce7f9..d4aea15 100644
--- a/src/app/[locale]/checkout/page.tsx
+++ b/src/app/[locale]/checkout/page.tsx
@@ -19,6 +19,9 @@ import {
   CHECKOUT_METADATA_UPDATE,
   CHECKOUT_SHIPPING_METHOD_UPDATE,
 } from "@/lib/saleor/mutations/Checkout";
+import { CREATE_TRANSACTION_MUTATION } from "@/lib/saleor/payments/cod";
+import { PaymentSection } from "./components/PaymentSection";
+import { DEFAULT_PAYMENT_METHOD } from "@/lib/config/paymentMethods";
 import { GET_CHECKOUT_BY_ID } from "@/lib/saleor/queries/Checkout";
 import type { Checkout } from "@/types/saleor";
 
@@ -38,7 +41,7 @@ interface BillingAddressUpdateResponse {
 
 interface CheckoutCompleteResponse {
   checkoutComplete?: {
-    order?: { number: string };
+    order?: { id: string; number: string };
     errors?: Array<{ message: string }>;
   };
 }
@@ -104,6 +107,7 @@ export default function CheckoutPage() {
   const [orderNumber, setOrderNumber] = useState<string | null>(null);
 
   const [sameAsShipping, setSameAsShipping] = useState(true);
+  const [selectedPaymentMethod, setSelectedPaymentMethod] = useState<string>(DEFAULT_PAYMENT_METHOD);
   const [shippingAddress, setShippingAddress] = useState<AddressForm>({
     firstName: "",
     lastName: "",
@@ -277,6 +281,11 @@ export default function CheckoutPage() {
       return;
     }
 
+    if (!selectedPaymentMethod) {
+      setError(t("errorSelectPayment"));
+      return;
+    }
+
     setIsLoading(true);
     setError(null);
 
@@ -377,6 +386,37 @@ export default function CheckoutPage() {
         const order = completeResult.data?.checkoutComplete?.order;
         if (order) {
           setOrderNumber(order.number);
+          
+          // Create COD transaction for the order
+          if (selectedPaymentMethod === 'cod') {
+            console.log("Step 6: Creating COD transaction...");
+            try {
+              await saleorClient.mutate({
+                mutation: CREATE_TRANSACTION_MUTATION,
+                variables: {
+                  id: order.id,
+                  transaction: {
+                    name: "Cash on Delivery",
+                    pspReference: `COD-${order.number}-${Date.now()}`,
+                    availableActions: ["CHARGE"],
+                    amountAuthorized: {
+                      amount: 0,
+                      currency: "RSD"
+                    },
+                    amountCharged: {
+                      amount: 0,
+                      currency: "RSD"
+                    }
+                  }
+                }
+              });
+              console.log("Step 6: COD transaction created successfully");
+            } catch (txError) {
+              console.error("Failed to create COD transaction:", txError);
+              // Don't fail the order if transaction creation fails
+            }
+          }
+          
           setOrderComplete(true);
           
           // Track order completion
@@ -660,6 +700,15 @@ export default function CheckoutPage() {
                     )}
                   </div>
 
+                  {/* Payment Method Section */}
+                  <PaymentSection
+                    selectedMethodId={selectedPaymentMethod}
+                    onSelectMethod={setSelectedPaymentMethod}
+                    locale={locale}
+                    channel="default-channel"
+                    disabled={isLoading}
+                  />
+
                   <button
                     type="submit"
                     disabled={isLoading || lines.length === 0 || !selectedShippingMethod}
diff --git a/src/components/payment/CODInstructions.tsx b/src/components/payment/CODInstructions.tsx
new file mode 100644
index 0000000..5ea9bc8
--- /dev/null
+++ b/src/components/payment/CODInstructions.tsx
@@ -0,0 +1,55 @@
+"use client";
+
+import { useTranslations } from "next-intl";
+import { Banknote, Package, CheckCircle } from "lucide-react";
+
+interface CODInstructionsProps {
+  locale: string;
+}
+
+export function CODInstructions({ locale }: CODInstructionsProps) {
+  const t = useTranslations("Payment.COD");
+
+  const instructions = [
+    {
+      icon: Banknote,
+      title: t("instructions.prepareCash"),
+      description: t("instructions.prepareCashDesc"),
+    },
+    {
+      icon: Package,
+      title: t("instructions.inspectOrder"),
+      description: t("instructions.inspectOrderDesc"),
+    },
+    {
+      icon: CheckCircle,
+      title: t("instructions.noFee"),
+      description: t("instructions.noFeeDesc"),
+    },
+  ];
+
+  return (
+    <div className="mt-4 rounded-lg bg-blue-50 p-4">
+      <h4 className="mb-3 font-medium text-blue-900">
+        {t("instructions.title")}
+      </h4>
+
+      <div className="space-y-3">
+        {instructions.map((instruction, index) => {
+          const Icon = instruction.icon;
+          return (
+            <div key={index} className="flex items-start gap-3">
+              <div className="flex h-8 w-8 shrink-0 items-center justify-center rounded-full bg-blue-100">
+                <Icon className="h-4 w-4 text-blue-600" />
+              </div>
+              <div>
+                <p className="font-medium text-blue-900">{instruction.title}</p>
+                <p className="text-sm text-blue-700">{instruction.description}</p>
+              </div>
+            </div>
+          );
+        })}
+      </div>
+    </div>
+  );
+}
diff --git a/src/components/payment/PaymentMethodCard.tsx b/src/components/payment/PaymentMethodCard.tsx
new file mode 100644
index 0000000..817f797
--- /dev/null
+++ b/src/components/payment/PaymentMethodCard.tsx
@@ -0,0 +1,84 @@
+"use client";
+
+import { cn } from "@/lib/utils";
+import type { PaymentMethod } from "@/lib/saleor/payments/types";
+import { Banknote, CreditCard, Building2, LucideIcon } from "lucide-react";
+
+// Icon mapping for payment methods
+const iconMap: Record<string, LucideIcon> = {
+  Banknote,
+  CreditCard,
+  Building2,
+};
+
+interface PaymentMethodCardProps {
+  method: PaymentMethod;
+  isSelected: boolean;
+  onSelect: () => void;
+  disabled?: boolean;
+  locale: string;
+}
+
+export function PaymentMethodCard({
+  method,
+  isSelected,
+  onSelect,
+  disabled = false,
+  locale,
+}: PaymentMethodCardProps) {
+  const Icon = method.icon ? iconMap[method.icon] : Banknote;
+
+  return (
+    <label
+      className={cn(
+        "relative flex cursor-pointer items-start gap-3 rounded-lg border p-4 transition-all",
+        "hover:border-gray-400",
+        isSelected && "border-black bg-gray-50",
+        !isSelected && "border-gray-200 bg-white",
+        (disabled || !method.available) && "cursor-not-allowed opacity-50"
+      )}
+    >
+      <input
+        type="radio"
+        name="payment-method"
+        value={method.id}
+        checked={isSelected}
+        onChange={onSelect}
+        disabled={disabled || !method.available}
+        className="sr-only"
+      />
+
+      <div className="flex h-10 w-10 shrink-0 items-center justify-center rounded-full bg-gray-100">
+        {Icon && <Icon className="h-5 w-5 text-gray-600" />}
+      </div>
+
+      <div className="flex-1">
+        <div className="flex items-center justify-between">
+          <span className="font-medium text-gray-900">{method.name}</span>
+          {method.fee > 0 && (
+            <span className="text-sm text-amber-600">
+              +{new Intl.NumberFormat(locale === 'sr' ? 'sr-RS' : 'en-US', {
+                style: 'currency',
+                currency: 'RSD',
+              }).format(method.fee)}
+            </span>
+          )}
+        </div>
+
+        <p className="mt-1 text-sm text-gray-600">{method.description}</p>
+
+        {!method.available && (
+          <span className="mt-2 inline-block text-xs text-gray-500">
+            {locale === 'sr' ? 'Uskoro dostupno' : 'Coming soon'}
+          </span>
+        )}
+
+        {isSelected && (
+          <div className="absolute right-4 top-4">
+            <div className="h-2 w-2 rounded-full bg-black" />
+          </div>
+        )}
+      </div>
+    </label>
+  );
+}
diff --git a/src/components/payment/PaymentMethodSelector.tsx b/src/components/payment/PaymentMethodSelector.tsx
new file mode 100644
index 0000000..c9c30e4
--- /dev/null
+++ b/src/components/payment/PaymentMethodSelector.tsx
@@ -0,0 +1,62 @@
+"use client";
+
+import type { PaymentMethod } from "@/lib/saleor/payments/types";
+import { PaymentMethodCard } from "./PaymentMethodCard";
+import { useTranslations } from "next-intl";
+
+interface PaymentMethodSelectorProps {
+  methods: PaymentMethod[];
+  selectedMethodId: string;
+  onSelectMethod: (methodId: string) => void;
+  locale: string;
+  disabled?: boolean;
+}
+
+export function PaymentMethodSelector({
+  methods,
+  selectedMethodId,
+  onSelectMethod,
+  locale,
+  disabled = false,
+}: PaymentMethodSelectorProps) {
+  const t = useTranslations("Payment");
+
+  // Filter to only available methods
+  const availableMethods = methods.filter((m) => m.available);
+
+  if (availableMethods.length === 0) {
+    return (
+      <div className="rounded-lg border border-gray-200 p-4 text-center text-gray-500">
+        {t("noMethodsAvailable")}
+      </div>
+    );
+  }
+
+  // If only one method, show it as selected but don't allow changing
+  const isSingleMethod = availableMethods.length === 1;
+
+  return (
+    <div className="space-y-4">
+      <h3 className="text-lg font-medium">{t("title")}</h3>
+
+      <div className="space-y-3">
+        {availableMethods.map((method) => (
+          <PaymentMethodCard
+            key={method.id}
+            method={method}
+            isSelected={selectedMethodId === method.id}
+            onSelect={() => onSelectMethod(method.id)}
+            disabled={disabled || isSingleMethod}
+            locale={locale}
+          />
+        ))}
+      </div>
+
+      {isSingleMethod && (
+        <p className="text-sm text-gray-500">
+          {t("singleMethodNotice")}
+        </p>
+      )}
+    </div>
+  );
+}
diff --git a/src/components/payment/index.ts b/src/components/payment/index.ts
new file mode 100644
index 0000000..0dc7b11
--- /dev/null
+++ b/src/components/payment/index.ts
@@ -0,0 +1,4 @@
+// Payment components exports
+export { PaymentMethodSelector } from "./PaymentMethodSelector";
+export { PaymentMethodCard } from "./PaymentMethodCard";
+export { CODInstructions } from "./CODInstructions";
diff --git a/src/i18n/messages/de.json b/src/i18n/messages/de.json
index 4e3026e..cce7ce7 100644
--- a/src/i18n/messages/de.json
+++ b/src/i18n/messages/de.json
@@ -383,6 +383,37 @@
     "thankYou": "Vielen Dank für Ihren Einkauf.",
     "orderNumber": "Bestellnummer",
     "confirmationEmail": "Sie erhalten in Kürze eine Bestätigungs-E-Mail. Wir werden Sie kontaktieren, um Nachnahme zu arrangieren.",
-    "continueShoppingBtn": "Weiter einkaufen"
+    "continueShoppingBtn": "Weiter einkaufen",
+    "errorSelectPayment": "Bitte wählen Sie eine Zahlungsmethode."
+  },
+  "Payment": {
+    "title": "Zahlungsmethode",
+    "selectMethod": "Zahlungsmethode wählen",
+    "securePayment": "Sichere Zahlungsabwicklung",
+    "noMethodsAvailable": "Keine Zahlungsmethoden verfügbar",
+    "singleMethodNotice": "Nachnahme ist die einzige verfügbare Zahlungsmethode für Ihren Standort",
+    "COD": {
+      "name": "Nachnahme",
+      "description": "Bezahlen Sie bei Erhalt Ihrer Bestellung",
+      "instructions": {
+        "title": "Zahlungsanweisungen",
+        "prepareCash": "Bargeld vorbereiten",
+        "prepareCashDesc": "Bitte haben Sie den genauen Betrag in bar bereit",
+        "inspectOrder": "Vor Zahlung prüfen",
+        "inspectOrderDesc": "Sie können Ihre Bestellung vor der Zahlung überprüfen",
+        "noFee": "Keine zusätzliche Gebühr",
+        "noFeeDesc": "Nachnahme ist völlig kostenlos"
+      }
+    },
+    "card": {
+      "name": "Kreditkarte",
+      "description": "Sichere Online-Zahlung",
+      "comingSoon": "Demnächst verfügbar"
+    },
+    "bank_transfer": {
+      "name": "Banküberweisung",
+      "description": "Bezahlen Sie per Banküberweisung",
+      "comingSoon": "Demnächst verfügbar"
+    }
   }
 }
\ No newline at end of file
diff --git a/src/i18n/messages/en.json b/src/i18n/messages/en.json
index 9c7d482..055c1ac 100644
--- a/src/i18n/messages/en.json
+++ b/src/i18n/messages/en.json
@@ -430,6 +430,37 @@
     "thankYou": "Thank you for your purchase.",
     "orderNumber": "Order Number",
     "confirmationEmail": "You will receive a confirmation email shortly. We will contact you to arrange Cash on Delivery.",
-    "continueShoppingBtn": "Continue Shopping"
+    "continueShoppingBtn": "Continue Shopping",
+    "errorSelectPayment": "Please select a payment method."
+  },
+  "Payment": {
+    "title": "Payment Method",
+    "selectMethod": "Select payment method",
+    "securePayment": "Secure payment processing",
+    "noMethodsAvailable": "No payment methods available",
+    "singleMethodNotice": "Cash on Delivery is the only available payment method for your location",
+    "COD": {
+      "name": "Cash on Delivery",
+      "description": "Pay when you receive your order",
+      "instructions": {
+        "title": "Payment Instructions",
+        "prepareCash": "Prepare Cash",
+        "prepareCashDesc": "Please have the exact amount ready in cash",
+        "inspectOrder": "Inspect Before Paying",
+        "inspectOrderDesc": "You can check your order before making payment",
+        "noFee": "No Extra Fee",
+        "noFeeDesc": "Cash on Delivery is completely free"
+      }
+    },
+    "card": {
+      "name": "Credit Card",
+      "description": "Secure online payment",
+      "comingSoon": "Coming soon"
+    },
+    "bank_transfer": {
+      "name": "Bank Transfer",
+      "description": "Pay via bank transfer",
+      "comingSoon": "Coming soon"
+    }
   }
 }
diff --git a/src/i18n/messages/fr.json b/src/i18n/messages/fr.json
index 2d93a15..338a98f 100644
--- a/src/i18n/messages/fr.json
+++ b/src/i18n/messages/fr.json
@@ -383,6 +383,37 @@
     "thankYou": "Merci pour votre achat.",
     "orderNumber": "Numéro de Commande",
     "confirmationEmail": "Vous recevrez bientôt un email de confirmation. Nous vous contacterons pour organiser le paiement contre-remboursement.",
-    "continueShoppingBtn": "Continuer les Achats"
+    "continueShoppingBtn": "Continuer les Achats",
+    "errorSelectPayment": "Veuillez sélectionner un mode de paiement."
+  },
+  "Payment": {
+    "title": "Mode de Paiement",
+    "selectMethod": "Sélectionner le mode de paiement",
+    "securePayment": "Paiement sécurisé",
+    "noMethodsAvailable": "Aucun mode de paiement disponible",
+    "singleMethodNotice": "Le paiement à la livraison est le seul mode de paiement disponible pour votre région",
+    "COD": {
+      "name": "Paiement à la Livraison",
+      "description": "Payez lors de la réception de votre commande",
+      "instructions": {
+        "title": "Instructions de Paiement",
+        "prepareCash": "Préparer l'Argent",
+        "prepareCashDesc": "Veuillez préparer le montant exact en espèces",
+        "inspectOrder": "Inspecter Avant de Payer",
+        "inspectOrderDesc": "Vous pouvez vérifier votre commande avant de payer",
+        "noFee": "Pas de Frais Supplémentaires",
+        "noFeeDesc": "Le paiement à la livraison est entièrement gratuit"
+      }
+    },
+    "card": {
+      "name": "Carte de Crédit",
+      "description": "Paiement en ligne sécurisé",
+      "comingSoon": "Bientôt disponible"
+    },
+    "bank_transfer": {
+      "name": "Virement Bancaire",
+      "description": "Payez par virement bancaire",
+      "comingSoon": "Bientôt disponible"
+    }
   }
 }
\ No newline at end of file
diff --git a/src/i18n/messages/sr.json b/src/i18n/messages/sr.json
index 23fc54e..c3db851 100644
--- a/src/i18n/messages/sr.json
+++ b/src/i18n/messages/sr.json
@@ -429,6 +429,37 @@
     "thankYou": "Hvala vam na kupovini!",
     "orderNumber": "Broj narudžbine",
     "confirmationEmail": "Uскoro ćete primiti email potvrde. Kontaktiraćemo vas da dogovorimo pouzećem plaćanje.",
-    "continueShoppingBtn": "Nastavi kupovinu"
+    "continueShoppingBtn": "Nastavi kupovinu",
+    "errorSelectPayment": "Molimo izaberite način plaćanja."
+  },
+  "Payment": {
+    "title": "Način Plaćanja",
+    "selectMethod": "Izaberite način plaćanja",
+    "securePayment": "Bezbedno plaćanje",
+    "noMethodsAvailable": "Nema dostupnih načina plaćanja",
+    "singleMethodNotice": "Plaćanje pouzećem je jedini dostupan način plaćanja za vašu lokaciju",
+    "COD": {
+      "name": "Plaćanje Pouzećem",
+      "description": "Platite kada primite porudžbinu",
+      "instructions": {
+        "title": "Uputstva za Plaćanje",
+        "prepareCash": "Pripremite Gotovinu",
+        "prepareCashDesc": "Molimo pripremite tačan iznos u gotovini",
+        "inspectOrder": "Pregledajte Pre Plaćanja",
+        "inspectOrderDesc": "Možete pregledati porudžbinu pre nego što platite",
+        "noFee": "Bez Dodatne Naknade",
+        "noFeeDesc": "Plaćanje pouzećem je potpuno besplatno"
+      }
+    },
+    "card": {
+      "name": "Kreditna Kartica",
+      "description": "Bezbedno online plaćanje",
+      "comingSoon": "Uskoro dostupno"
+    },
+    "bank_transfer": {
+      "name": "Bankovni Transfer",
+      "description": "Platite putem bankovnog transfera",
+      "comingSoon": "Uskoro dostupno"
+    }
   }
 }
diff --git a/src/lib/config/paymentMethods.ts b/src/lib/config/paymentMethods.ts
new file mode 100644
index 0000000..f94e768
--- /dev/null
+++ b/src/lib/config/paymentMethods.ts
@@ -0,0 +1,106 @@
+/**
+ * Payment methods configuration
+ * Centralized configuration for all available payment methods
+ */
+
+import type { PaymentMethod, Money } from '@/lib/saleor/payments/types';
+
+/**
+ * List of all available payment methods
+ * Configure availability per channel, fees, and other settings
+ */
+export const paymentMethods: PaymentMethod[] = [
+  {
+    id: 'cod',
+    name: 'Cash on Delivery',
+    description: 'Pay when you receive your order',
+    type: 'simple',
+    fee: 0,
+    available: true,
+    availableInChannels: ['default-channel'], // Currently Serbia only
+    icon: 'Banknote',
+  },
+  {
+    id: 'card',
+    name: 'Credit Card',
+    description: 'Secure online payment',
+    type: 'app',
+    fee: 0,
+    available: false, // Coming soon
+    availableInChannels: ['default-channel'],
+    icon: 'CreditCard',
+  },
+  {
+    id: 'bank_transfer',
+    name: 'Bank Transfer',
+    description: 'Pay via bank transfer',
+    type: 'simple',
+    fee: 0,
+    available: false, // Coming later
+    availableInChannels: ['default-channel'],
+    icon: 'Building2',
+  },
+];
+
+/**
+ * Get payment methods available for a specific channel
+ */
+export function getPaymentMethodsForChannel(channel: string): PaymentMethod[] {
+  return paymentMethods.filter(
+    (method) =>
+      method.available && method.availableInChannels.includes(channel)
+  );
+}
+
+/**
+ * Get a specific payment method by ID
+ */
+export function getPaymentMethodById(id: string): PaymentMethod | undefined {
+  return paymentMethods.find((method) => method.id === id);
+}
+
+/**
+ * Check if a payment method is available for a channel
+ */
+export function isPaymentMethodAvailable(
+  methodId: string,
+  channel: string
+): boolean {
+  const method = getPaymentMethodById(methodId);
+  if (!method) return false;
+  return method.available && method.availableInChannels.includes(channel);
+}
+
+/**
+ * Default payment method ID
+ * Used when no payment method is explicitly selected
+ */
+export const DEFAULT_PAYMENT_METHOD = 'cod';
+
+/**
+ * Channel configuration
+ * Maps channels to their supported payment methods
+ */
+export const channelPaymentConfig: Record<string, string[]> = {
+  'default-channel': ['cod'], // Serbia - COD only for now
+};
+
+/**
+ * Format payment method fee for display
+ */
+export function formatPaymentFee(fee: number, currency: string): string {
+  if (fee === 0) return 'No additional fee';
+  return new Intl.NumberFormat('en-US', {
+    style: 'currency',
+    currency: currency,
+  }).format(fee);
+}
+
+/**
+ * Generate PSP reference for COD transactions
+ * Format: COD-{orderNumber}-{timestamp}
+ */
+export function generateCODReference(orderNumber: string): string {
+  const timestamp = Date.now();
+  return `COD-${orderNumber}-${timestamp}`;
+}
diff --git a/src/lib/saleor/payments/cod.ts b/src/lib/saleor/payments/cod.ts
new file mode 100644
index 0000000..ad2f4d1
--- /dev/null
+++ b/src/lib/saleor/payments/cod.ts
@@ -0,0 +1,149 @@
+/**
+ * Cash on Delivery (COD) payment logic
+ * Handles creation of COD transactions in Saleor
+ */
+
+import type { Money, TransactionInput } from '@/lib/saleor/payments/types';
+import { generateCODReference } from '@/lib/config/paymentMethods';
+
+import { gql } from "@apollo/client";
+
+/**
+ * GraphQL mutation to create a transaction on an order
+ */
+export const CREATE_TRANSACTION_MUTATION = gql`
+  mutation TransactionCreate($id: ID!, $transaction: TransactionCreateInput!) {
+    transactionCreate(id: $id, transaction: $transaction) {
+      transaction {
+        id
+        name
+        pspReference
+        status
+        availableActions
+        amountAuthorized {
+          amount
+          currency
+        }
+        amountCharged {
+          amount
+          currency
+        }
+      }
+      errors {
+        field
+        message
+        code
+      }
+    }
+  }
+`;
+
+/**
+ * Create a Cash on Delivery transaction configuration
+ * @param orderNumber - The order number for reference
+ * @param amount - The order total amount
+ * @returns TransactionInput for Saleor
+ */
+export function createCODTransactionInput(
+  orderNumber: string,
+  amount: Money
+): TransactionInput {
+  return {
+    name: 'Cash on Delivery',
+    pspReference: generateCODReference(orderNumber),
+    availableActions: ['CHARGE'],
+    amountAuthorized: {
+      amount: 0,
+      currency: amount.currency,
+    },
+    amountCharged: {
+      amount: 0,
+      currency: amount.currency,
+    },
+    externalUrl: null,
+  };
+}
+
+/**
+ * Create COD transaction on an order
+ * This should be called after checkoutComplete creates the order
+ * 
+ * @param orderId - Saleor order ID
+ * @param orderNumber - Human-readable order number
+ * @param amount - Order total amount
+ * @returns Promise with transaction result
+ */
+export async function createCODTransaction(
+  orderId: string,
+  orderNumber: string,
+  amount: Money
+): Promise<{ success: boolean; transaction?: unknown; errors?: unknown[] }> {
+  try {
+    // Note: This function should be called from a Server Component or API route
+    // as it requires making a GraphQL mutation with authentication
+    
+    const transactionInput = createCODTransactionInput(orderNumber, amount);
+    
+    // The actual GraphQL call will be made in the checkout page
+    // This function just prepares the input
+    return {
+      success: true,
+      transaction: {
+        orderId,
+        ...transactionInput,
+      },
+    };
+  } catch (error) {
+    console.error('Error creating COD transaction:', error);
+    return {
+      success: false,
+      errors: [{ message: 'Failed to create COD transaction' }],
+    };
+  }
+}
+
+/**
+ * Check if an order has a COD transaction
+ * @param order - Order object from Saleor
+ * @returns boolean
+ */
+export function hasCODTransaction(order: { transactions?: Array<{ name?: string }> }): boolean {
+  if (!order.transactions || order.transactions.length === 0) {
+    return false;
+  }
+  
+  return order.transactions.some(
+    (t) => t.name === 'Cash on Delivery'
+  );
+}
+
+/**
+ * Get COD transaction from order
+ * @param order - Order object from Saleor
+ * @returns COD transaction or undefined
+ */
+export function getCODTransaction(order: { transactions?: Array<{ name?: string }> }) {
+  if (!order.transactions) return undefined;
+  
+  return order.transactions.find(
+    (t) => t.name === 'Cash on Delivery'
+  );
+}
+
+/**
+ * Format COD status for display
+ * @param transactionStatus - Transaction status from Saleor
+ * @returns Human-readable status
+ */
+export function formatCODStatus(transactionStatus: string): string {
+  switch (transactionStatus) {
+    case 'NOT_CHARGED':
+      return 'Pending Collection';
+    case 'CHARGED':
+      return 'Paid';
+    case 'CANCELLED':
+      return 'Cancelled';
+    default:
+      return transactionStatus;
+  }
+}
diff --git a/src/lib/saleor/payments/types.ts b/src/lib/saleor/payments/types.ts
new file mode 100644
index 0000000..769abf9
--- /dev/null
+++ b/src/lib/saleor/payments/types.ts
@@ -0,0 +1,62 @@
+/**
+ * Payment method type definitions
+ * Supports both simple payments (COD, Bank Transfer) and Payment Apps (Stripe, etc.)
+ */
+
+export type PaymentType = 'simple' | 'async' | 'app';
+
+export interface Money {
+  amount: number;
+  currency: string;
+}
+
+export interface PaymentMethod {
+  id: string;
+  name: string;
+  description: string;
+  type: PaymentType;
+  fee: number;
+  available: boolean;
+  availableInChannels: string[];
+  icon?: string;
+}
+
+export interface TransactionInput {
+  name: string;
+  pspReference: string;
+  availableActions: string[];
+  amountAuthorized?: Money;
+  amountCharged?: Money;
+  externalUrl?: string | null;
+}
+
+export interface AsyncSession {
+  id: string;
+  status: 'pending' | 'completed' | 'failed';
+  paymentUrl?: string;
+  qrCode?: string;
+  timeout?: number;
+}
+
+export interface PaymentResult {
+  type: 'order_created' | 'session_created' | 'error';
+  order?: {
+    id: string;
+    number: string;
+  };
+  session?: AsyncSession;
+  error?: string;
+}
+
+export interface PaymentStatus {
+  status: 'pending' | 'completed' | 'failed';
+  message?: string;
+}
+
+export interface CODTransactionConfig {
+  name: string;
+  pspReference: string;
+  availableActions: ['CHARGE'];
+  amountAuthorized: Money;
+  amountCharged: Money;
+}