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.lucky royal

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.

What types of payment services are covered under the Payment Services Act?

A payment service is covered under the Payment Services Act if it is:

An account issuance service A domestic money transfer service A cross‑border money transfer service A merchant acquisition service An e-money issuance service A digital payment token service A money‑changing service

When the Act was introduced, existing payment service providers were exempt and could continue providing these services pending the review of their licence applications.

Qoo10 is not licensed by MAS but was exempted and could continue conducting payment services while its application was being reviewed.

According to the Ministry of Home Affairs website, Qoo10 provides an in-platform secure escrow payment service for all transactions.

All payments for orders made on the platform are collected and temporarily held by Qoo10 until the orders are successfully fulfilled.

With each order, the platform only releases money to the seller when the buyer confirms that they have received what they ordered.

Collapse ExpandRelated:Police investigating e-commerce platform Qoo10 over payment delays to vendors

MAS said the suspension does not prohibit Qoo10 from operating its e-commerce platform.

However, there are currently no alternative payment methods available on the platform so consumers would not be able to make any payments on the platform, the MAS spokesperson added.

In a statement on its website on Monday, Qoo10 informed buyers that its payment gateway was "temporarily unavailable" and that it was working to implement a "more streamlined and reliable payment system".

"We anticipate the service will be reinstated shortly and appreciate your understanding during this period," it added.

MAS said it would review Qoo10's suspension when it can show the authority that it is able to resolve the payment delays and "safeguard the interest of its customers in Singapore on an ongoing basis".

It urged merchants facing payment delays to raise their concerns with Qoo10.

If these concerns remain unresolved, there are "established processes" to assist merchants in resolving commercial disputes, including debt recovery, said MAS.

For examplelucky royal, such merchants can consider filing civil claims with the courts, added the authority.

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