Qoo10, the Southeast Asian e-commerce platform, is feeling the wrath of the Monetary Authority of Singapore (MAS) as the regulator directs Qoo10 to suspend the provision of all payment services following merchant payment delays.
The announcement will not completely shut down Qoo10. Users will still be able to access its e-commerce platform, however, it will need to engage a third-party payment service provider for transactions. In 2019, the Payments Services Act was created to introduce a framework which would provide the licensing and regulation of payment service providers. Existing payments service providers were exempted and could continue these services pending the review of their licence applications by MAS.
This meant their services would not be disrupted as their licence was pending. Qoo10 is not licensed by MAS, but was exempted and could continue conducting payment services while its licence application was being reviewed.
Arising problems
Between April and August 2024, MAS and other government agencies received several customer complaints against Qoo10 for delays in processing payments to its customers, who are merchants on Qoo10’s e-commerce platform. Qoo10 was asked to address these complaints, and while some were resolved, others remained outstanding. In early September 2024, Qoo10 informed MAS that a significant number of merchants will face payment delays.
MAS engaged with the management of Qoo10 about these delays and expressed serious concerns. The regulator provided opportunities for the e-commerce platform to remedy these concerns. It also required the company to take steps to satisfy MAS so that it would be able to meet its obligations to merchants on an ongoing basis. This included engaging a third-party payment service provider to offer the covered services.
Facing the consequences.
Despite warnings from MAS, Qoo10 has been unable to provide sufficient assurance that it has the resources and systems to meet its payment obligations to merchants in a timely manner.
As a result from 23 September 2024, MAS directed Qoo10 to suspend its covered payment services in Singapore. This decision was made to protect further businesses from being exposed to risks and potential losses that could take place using Qoo10.
Qoo10 will be permitted to make payments to satisfy outstanding claims by such merchants, but may not take on new payment obligations.
MAS will review the suspension when Qoo10 is able to satisfy MAS of its ability to resolve the payment delays and safeguard the interest of its customers in Singapore on an ongoing basis.
Taking action
Merchants facing payment delays should raise their concerns with Qoo10. If the concerns remain unresolved, there are established processes in place to assist merchants in resolving commercial disputes, inclusive of debt recovery.
For example, they can consider filing a civil claim with the courts. Merchants who face cash flow difficulties because of the payment delays may contact any of the participating financial institutions listed on Enterprise Singapore’s website to apply for the Enterprise Financing Scheme (working capital loan).
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