TMON, Wemakeprice face escalating payment crisis

[Photo by Yonhap]

South Korea’s e-commerce platforms TMON and Wemakeprice, ranked 6th and 7th in user numbers respectively, have failed to disburse payments, causing widespread financial distress across various sectors, including travel and finance.

According to industry and financial sources on Wednesday, payments through popular digital wallets like Naver Pay and Kakao Pay have been halted on TMON and Wemakeprice.

Even if users cancel transactions, refunds are currently difficult to obtain. Card payments and bank transfers are suspended on TMON. Naver Pay has stopped converting TMON-sold Happy Money into its own points, ceasing all related customer transactions.

Payment gateway (PG) companies have responded by blocking card cancellations for past transactions on Wemakeprice and TMON. This move aims to minimize losses as customer cancellation requests have surged.

Major banks have also temporarily halted advance payment loan programs for sellers on these platforms.

This wave of financial disconnection from TMON and Wemakeprice stems from the rapidly escalating scale of unpaid transactions.

Numerous travel companies, in particular, have not received payments for a significant number of products sold through the platforms. The travel industry estimates potential losses amounting to 100 billion won ($72.3 million).

Compounding the crisis, TMON’s inability to repay a seven-year maturity convertible bond has also come to light, further questioning its financial viability.

According to financial sector sources, TMON issued a 50 billion won private convertible bond in April 2017, which matured on April 24 of this year.

However, TMON failed to repay the full amount, managing to pay only 2 billion won and extending the remaining debt’s maturity by one year.