Gov’t to shorten settlement cycle for e-commerce deals

[Photo by Yonhap]

South Korea’s government and the ruling party People Power Party (PPP) are set to come up with preventive measures, such as a shorter settlement cycle that the country‘s e-commerce firms take to settle payments to vendors and stronger regulatory requirements for payment gateways (PGs). The move comes amid recent payment delays on two Qoo10 e-commerce platforms.

Most e-commerce firms in Korea usually make payments to merchants up to 60 days after customers pay on the platforms.

The measures were part of the program announced by officials from the government and the ruling party in a consultation meeting held on Tuesday. “We will introduce a shorter settlement period for e-commerce companies,” Kim Sang-hoon, chairman of the PPP’s policy committee, said. E-commerce firms are also required to manage sales proceeds under the program, whilw PG companies are subject to stronger oversight.