Gov’t to provide liquidity worth KRW 500 billion to vendors hit by Qoo10 payment delays

Aug 07, 2024, 11:00 am

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Finance Minister and Deputy Prime Minister Choi Sang-mok speaks at a government-ruling party meting at the National Assembly in Seoul on Aug. 7, 2024, to discuss ways to support small vendors facing payment delays by two e-commerce platforms – TMON and WeMakePrice./ Source: Yonhap

AsiaToday reporters Park Young-hoon, Lee Sun-young

Starting Friday, the limit on the settlement of sales of TMON and WeMakePrice will increase to up to 3 billion won.

Finance Minister Choi Sang-mok said that the government will reduce the time it takes for e-commerce platforms to pay vendors from the current 40 to 60 days, and to establish a separate management system for sales payment, during a government-ruling party meeting held at the National Assembly on Tuesday.

The minister also hinted at reviewing the electronic transaction act and other relevant regulations, saying, “Those that issue prepaid e-coupons and gift cards will be required to maintain 100 percent of their issued amount as a way to prevent a recurrence of such cases.” TMON and WeMakePrice are said to have sold massive amounts of gift cards at discounted prices, but no refunds for unused cards or vouchers have been made, partly due to the lack of funds at both the online platforms and issuing companies.

“The government and the PPP decided to offer support to ensure that customers of the two platforms receive refunds through their credit card company or the payment gateway within this week,” said Kim Sang-hoon, chairman of the ruling People Power Party (PPP) Policy Committee, at a briefing after the meeting.

“The ruling camp will seek to provide 300 billion won, or around 218 million U.S. dollars, in liquidity, including an emergency management fund of 200 billion won for the affected businesses. We will also review to provide loan support in case of wage arrears,” Kim added.

The separate management system for sales payment refers to escrow system, which is a type of legal holding account for items that cannot be released until predetermined conditions are satisfied. It is a safety device that prevents indiscriminate use of settlement payments.

Meanwhile, the Financial Services Commission and the Ministry of SMEs and Startups will implement financial support for e-commerce vendors hit by the recent payment delays of Qoo10-owned TMON and WeMakePrice.

The affected businesses may apply for an up to one-year extension on their existing loans beginning Wednesday.

Starting Friday, the liquidity support program of policy financial institutions for affected businesses will be launched. The Industrial Bank of Korea and the Korea Credit Guarantee Fund will receive applicants for a liquidity program that will provide over 300 billion won in credit guarantees at a preferential rate of 3.9 percent.

#liquidity #TMON #WeMakePrice #Qoo10