Payment delays at TMON and WeMakePrice increase damage and concerns

A citizen walks by in front of TIMON headquarters in Gangnam-gu, Seoul on July 24. Yonhap News

The damage caused by payment delays by Singapore-based e-commerce platform Qoo10 Group’s Korean subsidiaries WeMakePrice and TMON is spreading to consumers. Payments and cancellations through credit cards and payment gateways (PG) have become impossible, refunds are not being made normally, and the use of discounted gift certificates have also been blocked. Some in the industry predict that the damage will exceed at least 100 billion won.

According to the industry on July 24, electronic payment gateways (PG) companies that handle online credit card payments suspended transactions with WeMakePrice and TMON, making it impossible to pay with credit cards or cancel payments. An employee from a PG company said, “"We are checking the size of the damage, and refund requests should be made directly to the e-commerce companies.”

Payment gateways (PG) companies, including Naver Pay, Kakao Pay, and Toss Pay, have also stopped dealing with the e-commerce companies, such as TMON, so all payments and cancellations are currently blocked.

Some, such as Naver Pay and PAYCO, have also stopped converting Cultureland and Happymoney gift certificates, which were sold at discounted prices on TMON, into pay points since this day. This is because they are concerned about TMON’s payment ability and believe that the cash flow between TMON, gift voucher companies, and PG companies could be disrupted.

Charging and refunding of TMON Cash, the rechargeable reserve money that the e-commerce company had previously issued at a high discount rate of around 10 percent, has also been suspended.

According to TMON, as of the end of last month, the accumulated prepaid recharges totaled 560.96 million. However, the company has been currently covered by the Seoul Guarantee Insurance Company (SGI)’s payment guarantee insurance with a limit of 1 billion won, and users who are refused a refund can receive compensation through SGI’s review.

Commercial banks, including KB Kookmin and Standard Chartered Korea, have temporarily suspended the handling of pre-settlement loans to TIMON and WeMakePrice. A pre-settlement loan is a loan provided by a bank to e-commerce platform vendors so that they can receive payment without waiting for the settlement date after selling products. When the settlement date arrives, the bank receives the payment from the e-commerce company and automatically repays the loan. Banks have stopped handling pre-settlement loans because they have lost confidence in the settlement capabilities of TIMON and WeMakePrice, which has lowered the likelihood of loan repayment.

The Financial Supervisory Service said, “We are monitoring TIMON and WeMakePrice because they are both mail-order intermediaries and e-commerce companies under the Electronic Transactions Act, adding, “We are also looking into prepaid recharges such as TIMON Cash.”

※This article has undergone review by a professional translator after being translated by an AI translation tool.