Two years ago, the Financial Supervisory Service (FSS) signed a management improvement agreement with TMON and WeMakePrice after they experienced capital impairment. However, it has come to light that the FSS did not provide active oversight or intervention. The FSS stated on July 25 that while they lacked legal grounds for action, their guidance standards and supervisory system could not keep pace with the rapid growth of e-commerce companies.
Article 63 of the Electronic Financial Transactions Act requires electronic payment service providers like TMON and WeMakePrice to maintain positive equity at all times. If they fail to comply, the FSS can mandate an improvement plan or agreement or enter into a management improvement agreement. Despite entering into such agreements with TMON and WeMakePrice two years ago, these agreements were not legally binding and did not lead to mandatory corrective actions.
The FSS acknowledged that although TMON and WeMakePrice failed to meet capital requirements for an extended period, new companies often struggle with initial capital soundness, limiting the financial authorities’ ability to intervene.
On the same day, FSS Gov. Lee Bok-hyun, in a parliamentary report, admitted the FSS’s responsibility for the recent issue where TMON and WeMakePrice failed to settle seller payments. He apologized, stating, “Regardless of the reasons, we apologize for the burden and concern caused to the public.”
Also on July 25, the FSS and the Korea Fair Trade Commission sent a joint investigation team to the headquarters of TMON and WeMakePrice for an on-site inspection. FSS First Senior Deputy Gov. Lee Se-hoon reported that the unpaid amounts reported by TMON and WeMakePrice ranged from 160 billion to 170 billion won, and they are currently verifying the exact figures. He noted that the issue largely involves the failure to fulfill private contracts and urged Qoo10, the owner of TMON and WeMakePrice, to take responsible action. He also emphasized the need for cooperation to minimize consumer damage, especially among the card companies mediating between consumers and TMON/WeMakePrice and sellers in the travel industry.
