Gov't considering low-interest loans for merchants affected by TMON, WeMakePrice payout crisis

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Gov't considering low-interest loans for merchants affected by TMON, WeMakePrice payout crisis

Published: 26 Jul. 2024, 17:16 Updated: 28 Jul. 2024, 18:35

CHO YONG-JUN
cho.yongjun1@joongang.co.kr

WeMakePrice office in Gangnam District, southern Seoul on Friday [YONHAP]

The Korean government is considering tapping its emergency fund to provide low-interest loans to small merchants affected by payout delays at Qoo10-owned e-commerce sites TMON and WeMakePrice.

Specific details and the amount are likely to be decided in the government's second task force meeting scheduled for Monday, which will be led by Kim Beom-seok, the first vice minister of economy and finance.

“With the Fair Trade Commission, Financial Services Commission and Financial Supervisory Service at the center, related departments are currently closely discussing and reacting to the situation, and the president’s office has ordered [them] to come up with measures,” an official told reporters.

The Ministry of SMEs and Startups is currently looking into whether affected small- and medium-sized businesses listed on TMON and WeMakePrice are eligible for its emergency relief, the ministry told the Korea JoongAng Daily on Friday.

The ministry currently provides loans to small businesses hit by natural disasters, pandemics or other emergencies with its emergency fund.

“If businesses are suffering from temporary management issues, they may be eligible for emergency relief,” the ministry said.

It comes as the two imperiled e-commerce platforms halted on-site refunds for customers who flocked to their headquarters, leaving a notice encouraging them to inquire with credit card companies for refunds.

Mobile payment services like Naver Pay and Kakao Pay announced on Saturday that they would offer refund and cancel transactions for victims of the payout delays of TMON and WeMakePrice. Naver Pay started receiving applications from 10 a.m. on Sunday, and Kakao Pay, from noon.

"In a move to offer a quick and protective measure for customers, they can make applications by attaching screen captures of pages that prove they made payments through Naver Pay on TMON and WeMakePrice," Naver Pay said in a statement. "We will proceed them speedily within 48 hours of the application."

Their moves follow those of major credit card companies, which started offering refunds and canceling the transactions of customers who did not receive items or use services purchased from the two platforms.

With the supportive measures by banks and payment firms, TMON said it has completed some 600 refunds and cancellations as of Sunday morning, and also canceled around 24,600 gift cards.

WeMakePrice said it completed 3,500 refunds as of Sunday morning.

Commercial banks also announced plans to support affected businesses. KB Kookmin Bank will offer extended loan periods, repayment delays and lower interest rates.

The offerings are an effort to “minimize the damage to our customers,” the bank said Friday, adding that it would “divide the burden and fulfill our social responsibility.”

Standard Chartered Bank Korea and Shinhan Bank are also currently looking into ways of supporting affected customers.

TMON and WeMakePrice are no longer appearing in Naver and Kakao search results. Both companies announced Thursday that they would delist the platforms' products and services from their algorithms, including sponsored listings, in order to “prevent further damage.”

Meanwhile, Qoo10 is reportedly in the process of raising around $50 million through its California-based Wish in an effort to respond to the current turmoil. Details remain unknown.

Update, July 28: Added information about the task force meeting, Naver Pay and Kakao Pay processing refunds.

BY CHO YONG-JUN, SARAH CHEA [chea.sarah@joongang.co.kr]