SINGAPORE: E-commerce platform Qoo10 has been ordered by the Monetary Authority of Singapore (MAS) to suspend the provision of all payment services in Singapore from Monday (Sep 23) amid payment delays to its vendors.
While it has not been prohibited from operating its e-commerce platform, users are currently unable to make purchases on the platform.
“Qoo10 may need to engage a third party payment service provider for transactions on this platform,” said MAS.
Between April and August, MAS and other government agencies received several customer complaints against Qoo10 for delays in processing payments to customers, who are merchants on Qoo10’s platform.
“Qoo10 was asked to address these complaints, and while some were resolved, others remained outstanding,” said MAS in a media release.
In early September, Qoo10 informed MAS that a significant number of merchants would face payment delays. MAS engaged the platform’s management about the delays and expressed its “serious concerns”.
“MAS provided opportunities to Qoo10 to remedy these concerns and required the company to take steps to satisfy MAS that it would be able to meet its obligations to merchants on an ongoing basis, including engaging a third-party payment service provider to offer the covered services,” said the authority.
But to date, 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.
The authority therefore directed the platform to suspend its provision of payment services covered under the Payment Services Act from Monday.
“MAS has had to carefully consider the potential disruption the suspension could cause to Qoo10’s e-commerce platform or other services that are integrated with the covered payments services,” said MAS.
“However, permitting Qoo10 to continue providing covered payment services would expose more merchants using Qoo10’s covered payment services to risks of larger outstanding obligations and potential losses.
“Qoo10 will be permitted to make payments to satisfy outstanding claims by such merchants, but may not take on new payment obligations.”
In response to queries from CNA, MAS said that Qoo10 offered merchant acquisition, account issuance, domestic money transfer, cross-border money transfer and e-money issuance services.
“All five services are suspended,” a spokesperson for the authority said.
CNA reported earlier this month that police are investigating the e-commerce platform and that some merchants have filed claims with a tribunal.
