THE Monetary Authority of Singapore (MAS) has directed Singapore-headquartered e-commerce platform Qoo10 to suspend its provision of payment services locally from Sep 23.
This comes after the authorities received several merchant complaints between April and August this year against the platform for delays in processing payments.
The company was asked to address the complaints, some of which were resolved while others remained outstanding, said MAS in a media release on Monday (Sep 23).
Early this month, Qoo10 informed MAS that a significant number of merchants will face payment delays.
The financial regulator subsequently engaged with the company’s management about the delays, and offered it opportunities to remedy the situation.
Qoo10 was also asked to take steps to satisfy MAS that it would be able to meet its obligations to merchants on an ongoing basis, including engaging a third-party payment service provider to offer the covered services.
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But, to date, the company has been unable to provide sufficient assurance that it has the resources and systems to meet its payment obligations to its merchants in a timely manner, said MAS, which led to the suspension.
The regulator noted that it had carefully considered the potential disruption that the suspension could cause to Qoo10’s e-commerce platform or other services integrated with its covered payments services.
“(But) permitting Qoo10 to continue providing covered payments services would expose more merchants… to risks of larger outstanding obligations and potential losses,” stated the release.
The company will be allowed to make payments to fulfil outstanding claims by these merchants, but cannot take on new payment obligations.
While the suspension does not stop Qoo10 from operating its e-commerce platform, it may need to engage a third-party payment service provider for transactions on the platform, said MAS.
The suspension will be reviewed when the company can satisfy MAS of its ability to resolve the payment delays and safeguard the interests of its customers in Singapore on an ongoing basis, it added.
In a notice published on its website on Monday, Qoo10 said that its “payment gateway is temporarily unavailable as (it works) to implement a more streamlined and reliable payment system”. It added that it anticipates “the service will be reinstated shortly”.
Two weeks ago, The Straits Times reported that Qoo10 and its logistics subsidiary Qxpress were under police investigation. This followed complaints by vendors about delayed payments of thousands of dollars each, and delivery disruptions by the subsidiary.
The Singapore Police Force told the paper on Sep 12 that reports were lodged against both parties and that investigations are ongoing.
The company is also facing the heat in South Korea.
It was reported in July that two South Korean e-commerce platforms owned by Qoo10 – Tmon and WeMakePrice – had missed payments to its vendors.
Qoo10, backed by the likes of private equity firm KKR, attributed the issue to a glitch in its payment system.
Local financial authorities are said to have launched an investigation, with the government estimating that total missed payments by both the Seoul-based platforms amount to around 210 billion won (S$202.7 million).
South Korean authorities have announced the provision of low-interest loans for affected small businesses, as well as extensions on repayments of existing loans.
