SINGAPORE: Following the decision by Singapore's financial regulator to suspend payment services on Qoo10adbackhome or ad casino, some merchants on the e-commerce platform said the move has had little impact on efforts to claw back payments owed to them.
Shopping on Qoo10 has effectively been halted since Sep 23 when the Monetary Authority of Singapore (MAS) stepped in to address a growing issue of delayed payments to merchants.
While Qoo10 was not prohibited from operating its e-commerce platform, the suspension of payment services meant users could not make purchases on the site.
The owner of a furniture business who only wanted to be known as Mrs Zhang said she could worry less about having to fulfil new orders, but the MAS move has "no real use" in solving the issue of delayed payments.
Mrs Zhang, who is trying to get back more than S$40,000 (US$31,000) from Qoo10, described the situation as "stressful".
Several vendors whom CNA spoke to asked that only their last name or first name be published, citing business considerations.
Mr Toh, a seller waiting to be paid about S$13,800, also feels that the payment suspension does little for his situation.
"Currently, I feel that there’s no effect because ... it’s more like a reaction, like putting out fire," said Mr Toh, who sells household products and cosmetics.
"Not that it's totally not helpful. It just stopped Qoo10 from doing more damage."
Ms Angela Lee, the operations manager of Amberlys Cakes and Flowers, holds a more positive view of the recent development.
Previously, she received no indication from Qoo10 on when the payments she requested in July, August and September would come in.
But on the day MAS announced the suspension, she received an unexpected message from Qoo10 informing her that it would pay her around S$2,100 by Sep 29. This is a sizable portion of the "S$3,000 plus" Qoo10 owes her.
"I think there’s (a) certain type of impact," Ms Lee said about the MAS move.
"I don’t think it’s a coincidence - once MAS intervened, they suddenly decided to reply us after such a long time."
Among the five vendors CNA spoke to, only Ms Lee has received any indication of when she would be paid.
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Qoo10 making arrangements to transfer some owed money, say affected merchants ESCROW SERVICES The payment delays have raised questions about escrow services operated by e-commerce platforms like Qoo10.
An escrow service is a way to facilitate secure transactions by having a third party hold the funds until certain obligations are met, such as when an item is received.
E-commerce platforms often act as escrow agents for online purchases. In the event a transaction is unsuccessful, the platform or escrow agent will facilitate the fund transfer to the right party.
"It protects the seller from non-payment by the buyer and it protects the buyer from defective goods or goods not as advertised," explained Professor Thompson Teo, a member of the Department of Analytics and Operations at the National University of Singapore’s Business School.
"Escrow services also help to mediate if there is a dispute over a transaction."
One disadvantage for sellers is that they must abide by the terms of the e-commerce platform, which may change over time, said Prof Teo. There could also be additional fees or delays to payments.
Mr Toh, the Qoo10 vendor who is owed about S$13,800, said he hopes for more regulations to be put in place for e-commerce platforms.
He pointed out, for instance, that there is currently no rule on how long an e-commerce platform can hold the payments due to its sellers.
According to Mr Toh, Qoo10 used to allow his business to withdraw payments from its sales weekly. However, the time his money was held in escrow later lengthened to weeks and then months.
"As a seller, we are unable to do anything because it’s just what they say," he added, expressing worries about what platforms might do with the funds while they are held in escrow.
"The transaction that is going through the platform on a daily basis is very big. It’s in millions," he said.
"(In) one day, they can do a lot with our funds … let alone two months."
VENDORS HOPE FOR MORE ASSISTANCEExplaining the move to suspend payment services, MAS said on Sep 23 that allowing Qoo10 to continue would expose more merchants 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," it stated.
It added that Qoo10 may need to engage a third-party payment service provider for transactions on the platform.
"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," it said.
However, some vendors hope that apart from preventing further losses, authorities can do more to help affected vendors get their money back.
Mr Liu, who is owed more than S$21,000, pointed to the situation in South Korea where two Qoo10 subsidiaries failed to pay their sellers. The government there stepped in to provide support, such as low-interest loans for affected small businesses.
He hopes similar measures or any form of assistance could be offered to vendors in Singapore as well.
Mr Dave, who sells electronics and office equipment on Qoo10, expressed frustration at the lack of clarity about the situation.
"There’s no news from Qoo10 … Nobody knows anything at this point in time," he said.
The platform owes him almost S$100,000 and the more than 30 emails he sent to the company have gone unanswered. This has left him unsure about whether he should continue to wait for the money or count it as a loss.
Hopefully "someone who has a certain authority can actually intervene for everyone, so that everyone knows what to expect", said Mr Dave.
"From thereadbackhome or ad casino, we can actually move on."
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