The South Korean government is reportedly considering a new regulation that would require e-commerce platforms to pay merchants within 10 days of a customer’s purchase. This move aims to prevent problems like the recent “TMON-WeMakePrice crisis” and discourage platforms from misusing funds by delaying payments to sellers.
According to industry insiders, the Korea Fair Trade Commission (FTC) has recently drafted an amendment to the Act on Fair Transactions in Large Retail Business, which includes this proposed rule. The draft suggests that platforms like TMON would be required to pay merchants for their goods within 10 to 20 days of confirming a purchase. The FTC plans to finalize the exact settlement period after consultations with industry stakeholders.
Currently, large supermarkets that purchase and resell products are legally obligated to settle payments with suppliers within 40 to 60 days. However, intermediaries like TMON and WeMakePrice (WMP) aren’t covered by these regulations. This gap has allowed platforms like TMON to extend settlement periods beyond 60 days and use these funds for other purposes, contributing to the recent crisis.
The proposed rule would apply to platforms with an “annual intermediary transaction amount of 100 billion won (about $74.96 million)” or more. Major e-commerce companies such as TMON, WMP, Naver, Coupang, 11Street, Gmarket, and Kakao would be affected. Service-oriented platforms like Baemin and Yanolja would also fall under this regulation. Non-compliance could result in fines and corrective actions from the FTC, with potential criminal charges for ignoring orders.
For service platforms, the settlement period might be even shorter than for goods. Since refunds are unlikely for services like food delivery once provided, faster payment settlements are reasonable. A government official also mentioned plans to introduce an “Escrow” regulation, requiring platforms to deposit a portion of payments with a secure institution.
