The Financial Supervisory Commission (FSC) is to investigate a buy-now-pay-later service offered on e-commerce platform Shopee to determine if it is likely to trigger a credit crisis for young consumers, the commission said yesterday.
The commission would examine the service mechanism that allows consumers without credit cards to delay payments by up to 45 days to see if the service exercises solid risk control, FSC Chairman Thomas Huang (黃天牧) told reporters on the sidelines of a meeting of the legislature’s Finance Committee in Taipei.
The service, launched last month, enables consumers to pay later, or by the 15th day of the following month, without having to pay interest, Shopee’s Web site says.
Photo: Tu Chien-jung, Taipei Times
The amount of payment that can be delayed is capped at NT$30,000, with wire transfer being the only financial tool for payment, it says.
The service also offers installment payment plans, but charges annual interest of up to 20 percent, the Web site says.
“The service is more accessible and convenient than credit cards,” Shopee said on its Web site.
The service is similar to banks’ credit card or lending service, as it enables consumers to shop first and pay later, Democratic Progressive Party (DPP) Legislator Michelle Lin (林楚茵) told the meeting.
“I am worried that this service would encourage young consumers to buy things they cannot afford. What is more concerning is that if the service has no solid credit risk management, it might cause another bad debt crisis,” Lin said.
The spending limit of NT$30,000 per person sounds not too much, but younger consumers are likely to use the service, she added.
The commission would check whether it is the third-party payment service provider ShopeePay Taiwan Co (蝦皮支付) or the e-commerce platform operator Shopee Taiwan Co (樂購蝦皮) that offers the service, Banking Bureau Director-General Sherri Chuang (莊琇媛) said.
Both ShopeePay and Shopee Taiwan fall under the Ministry of Economic Affairs’ supervision due to their businesses of third-party payment services and e-commerce respectively.
However, Chuang said that the commission could have some degree of control over ShopeePay, as the firm is planning to apply for a license to run an electronic payment service in Taiwan.
The FSC should ask ShopeePay to halt the buy-now-pay-later service when the firm applies for the license, as e-payment companies are not allowed to provide loans, she said.
That is because e-payment companies already allow consumers to park money on their platforms, and if they were to grant loans, they would be too similar to banks, which are subject to tighter regulations, Chuang said.
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