The Monetary Authority of Singapore (MAS) has asked e-commerce platform Qoo10 to suspend the provision of all payment services covered under the Payment Services Act 2019, or covered payment services, in Singapore from Sept 23.
On Sept 12, Qoo10 and its logistics subsidiary Qxpress were reported to be facing police investigations after vendors issued complaints about delayed payments and disruptions to deliveries by the latter.
Between April and August this year, the central bank and other government agencies received several complaints from Qoo10’s merchants over delays in processing payments. Qoo10 was asked to address these complaints. While some of the complaints were resolved, others remained outstanding. Qoo10 then informed MAS in September that a “significant number” of these merchants would face payment delays.
Despite MAS’s engagements with Qoo10, including giving the latter opportunities to remedy the central bank’s “serious concerns”, Qoo10 has been unable to provide sufficient assurance that it has the resources and systems to meet its payment obligations to its merchants in a timely manner.
“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,” reads the statement. “However, permitting Qoo10 to continue providing covered payments 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.”
The suspension does not prevent Qoo10 from operating its e-commerce platform, but it will have to engage a third-party service provider for transactions conducted on its platform. The suspension will be reviewed when Qoo10 is able to prove that it is able to resolve the payment delays and safeguard the interest of its customers in Singapore “on an ongoing basis”, says MAS.
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“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,” reads the statement.
“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),” it adds.
The Payment Services Act, which regulates the provision of payment services in Singapore, came into force on Jan 28, 2020. When the Act was introduced, existing payment service providers were exempted and could continue these services pending the review of their licence applications by MAS to prevent any disruptions.
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According to MAS, Qoo10 was not licensed by the central bank but was exempted and could continue conducting payment services while its licence application is being reviewed.
