Timon Card Payment Deferral Policies Vary... "I Won't Use Cards Anymore," Angry Consumers React

"I should have paid with Pay. Each card company has different refund and payment deferral policies, so it's confusing."

As the settlement delay issue with e-commerce companies Tmon and Wemakeprice (Wemakeprice) prolongs, dissatisfaction among credit card payment customers is rising. While some consumers who paid via Pay methods (Naver Pay, Kakao Pay, Toss Pay, etc.) have already received refunds, confusion is increasing as the payment deferral policies offered by card companies for affected customers differ from one another.

Consumer Confusion Due to Differences in Card Companies' Responses

[Image source=Yonhap News]

According to the financial sector on the 6th, nine card companies involved in the Tmef (Tmon and Wemakeprice) unsettled payment issue (Shinhan, Samsung, KB Kookmin, Hana, Hyundai, Lotte, BC, NH Nonghyup, and Woori) are accepting installment contract cancellations and objections from affected credit card customers and deferring payment of the settlement amount. This measure comes amid discussions that not only the payment gateway (PG) companies but also card companies may share the related burden.

Under the Installment Transactions Act, the right to cancel or object to an installment contract guarantees consumers the right to cancel payments or not pay the remaining installment balance if there is a problem with the purchased goods or services. This right can be exercised when the transaction amount is 200,000 KRW or more (per transaction) and the purchase was made in installments over three months or longer.

However, among Tmef consumers, complaints such as "Each card company has different payment deferral policies, so it's confusing" are emerging. In a social networking service (SNS) group chat for Tmef credit card payers, voices of dissatisfaction include statements like "Card A defers payment even for consumers who purchased in a lump sum rather than installments, but Card B absolutely does not." Some card companies have also failed to properly inform customers about the deferral period. One card user lamented, "I only received a text message without any information on how long the payment deferral lasts, which is frustrating."

A card industry official explained, "Even if it is not the right to cancel or object to installment contracts, card companies accept all complaints submitted through objections and verify them with PG companies, adjusting what can be handled for customers. This seems to be the cause of the situation. The payment deferral is also being guided without a fixed deadline, anticipating that the current situation may be prolonged."

Some customers have even staged solo protests demanding quick refunds from card companies. Some consumers express strong dissatisfaction, saying "I will no longer use cards," which is expected to affect future consumer card usage behavior.

"Pay refunds have been processed..." Frustrated Credit Card Payment Customers

Screenshot of Tmon consumer open chat room

For Pay payments at Tmef, if payment was made with money or points, immediate cancellation is possible, so refunds are relatively fast. In contrast, credit card payment customers feel they are at a disadvantage.

The delay in refunds from card companies and PGs is due to delayed data provision from Tmon and Wemakeprice. The PG industry verifies order information from Tmon and Wemakeprice before proceeding with refunds, considering the possibility of duplicate refunds or refund requests for delivered products. However, since Tmon and Wemakeprice have been nearly paralyzed due to staff reductions after the incident, refunds for card payments are delayed.

In contrast, the three Pay companies have accelerated refunds by directly securing order information. Naver Pay and Kakao Pay requested consumers who applied for refunds from the 27th of last month to attach screenshots of order details and delivery status. Naver Pay announced it would complete refunds within 48 hours after application, and Kakao Pay has been processing refunds sequentially since the 30th of last month.

Toss has increased refund speed by utilizing technology. In the transaction structure between Pay companies and e-commerce firms, if a consumer requests a refund after delivery has started, the Pay company cannot receive payment cancellation information. Conversely, if the consumer requests a refund before shipment, payment cancellation information is automatically sent to the Pay company. A Toss official explained, "We compare information received from Tmon and Wemakeprice with the information entered by the consumer on Toss and process refunds without additional authentication procedures."

Pay companies have also initiated refund procedures for the controversial travel products. The PG industry holds the position that the legal responsibility for travel product refunds should be determined between PG companies and travel agencies. As a result, refunds for travel products paid by card are on hold, while Pay companies are absorbing losses and proceeding with refunds.

A Pay industry official said, "Payments made with money via points or linked accounts involve fewer stakeholders and fewer payment steps, enabling faster refunds. If you paid with a credit or debit card linked to Pay, refunds take about 3 to 5 days like regular card payments, but Pay companies have relatively early payment cancellation and refund windows open, so refunds appear to be processed quickly."