A victim of payment delays from TMON and WeMakePrice participates in a demonstration calling for prompt refunds in front of the Korea Chamber of Commerce and Industry in central Seoul, Sunday. Yonhap

Financial authorities are considering a plan to decouple payment gateway services from e-commerce companies following the liquidity crunch at TMON and WeMakePrice that has caused delays in payments to sellers and refunds to customers, according to government sources, Sunday.

A payment gateway refers to settlement agent services that authorize credit card and direct payments for e-commerce sites and online retailers.

The envisioned measure is aimed at preventing e-commerce firms that also operate as payment gateway service providers — like the two Korean affiliates of Singapore-based e-commerce platform Qoo10 — from dipping into payment gateway funds when they face financial pressure.

"The ongoing issue lies in e-commerce platform operators internalizing payment gateway services, controlling settlement, sales and delivery as a single entity, and freely accessing the funds in payment gateway accounts," a ranking financial official said on condition of anonymity.

"Strengthening capital safety and soundness regulations could encourage the separation of these services."

According to the Ministry of Economy and Finance, the amount of unsettled payments from TMON and WeMakePrice has reached 274.5 billion won ($201 million), with concerns that this amount may increase. Investigators speculate that the massive cash crunch of the two firms stems from their parent company's aggressive mergers of e-commerce firms worldwide, aiming to list its logistics arm Qxpress on the Nasdaq.

Investigators remove evidence from the Seoul home of Ku Young-bae, circled in red, the CEO of Qoo10, which owns TMON and WeMakePrice, Thursday, as part of their ongoing investigation into delayed payments by the two e-commerce platforms. Yonhap

Financial authorities are looking to the cases of Coupang and Naver as well as Amazon to finalize the separation plan.

Coupang, Korea's largest e-commerce platform, used to run payment gateway services concurrently, but in 2020, established its subsidiary, Coupang Pay, to separate this function.

Similarly, Naver has also separated its payment gateway services into Naver Financial.

Amazon, the world's largest e-commerce company, uses external firms for payment gateway services, ensuring that funds do not flow into Amazon's internal accounts, according to the authorities here.

The government plans to announce additional response measures and system improvements soon in relation to the TMON and WeMakePrice incident.

Meanwhile, Ku Young-bae, the embattled founder and CEO of Qoo10, appears to have lost control over the firm's affiliates amid the snowballing crisis.

Market watchers say Qoo10, established 14 years ago, seems to be heading toward a de facto dissolution as each affiliate is seeking its own path to survival.

Interpark Commerce, another Qoo10 Korean affiliate, is preparing for a legal action against its parent firm, after payments to its vendors were delayed due to the ongoing liquidity problems at TMON and WeMakePrice.

"We cannot rely solely on Qoo10's support. We will pursue separate sale independent of the parent group," Interpark Commerce CEO Kim Dong-sik said during an interview with Yonhap News Agency on July 31.

In a similar move, TMON has started discussions with large-scale investors for investment and potential sale, while WeMakePrice is also pursuing a separate sale, amid growing sentiment that Ku has failed to offer any substantial responses or solutions despite the affiliates' worsening liquidity.

It is widely believed that the current situation of Qoo10, which has lost control over its affiliates, will not be of help to corporate rehabilitation procedure of TMON and WeMakePrice, either.

On July 29, the two cash-strapped firms applied for corporate rehabilitation with the Seoul Bankruptcy Court, saying their financial condition cannot be restored through self-rescue measures.