South Korean e-commerce giant Coupang is moving to acquire the payment affiliate of an undisclosed South Korean conglomerate although the deal has been halted due to the coronavirus pandemic.

The payment firm is reportedly a listed company which recorded more than 100 billion won ($83 million) in sales last year.

Coupang reportedly halted the negotiations as the valuation gap between Coupang and the seller was too great amid rising concerns over the coronavirus pandemic.

“Coupang has sat down with the payment company at the negotiation table to acquire the company, but little progress in narrowing the valuation gap has brought the deal to a standstill,” said an investment banking industry source. “The two sides may return to the negotiation table, but it will take a considerable amount of time to resume the process.”

Payment industry and investment banking industry insiders expect Coupang will keep its eye on the payment business. Coupang spun off its payment service CouPay in April to enhance its fintech business, indicating its ongoing interest in other payment gateway firms.

CouPay allows users to pay with registered bank accounts or cards. Transactions on Coupang’s shopping platform are largely made by its own payment option CouPay which has a membership of more than 10 million.

Users of Coupay have to deposit their money in Coupang’s simplified payment system, which makes the service less convenient compared to credit card payments. Coupang has been paying commission fees to payment gateway providers NHN KCP and KICC for credit card payments on the Coupang platform.

If Coupang acquires a payment gateway firm, the e-commerce leader will be able to reduce its commission fees while seeking new business opportunities. Industry insiders said Coupang will need to secure its payment platform to enhance connectivity with its newly launched food delivery service Coupang Eats. (Reporting Ik-hwan Choi)