Business

Japan's Financial Services Agency plans deregulation of nonbank money transfers

JIJI

The Financial Services Agency plans to allow nonbank firms to handle money transfers of over ¥1 million, sources have said.

The planed moved is aimed at promoting the market entry of companies featuring fintech services utilizing advanced information technology, reducing remittance charges and speeding up international money transfers, the sources said.

The Financial System Council, which advises the prime minister, is discussing the deregulation to draw up a policy for the new initiative as early as the summer.

The FSA aims to submit a bill to revise related legislation to next year’s ordinary Diet session.

The maximum remittance amount per single transfer by nonbank businesses, which offer services at lower costs than at banks, is currently set at ¥1 million, while there is no such limit for banks.

Fintech companies are calling for the limit to be raised or abolished in order to diversify their services, as it is not easy to obtain a banking license.

The FSA plans to abolish the upper limit for nonbank businesses that will be classified into a new business category it will establish, the sources said.

Such nonbank business operators will be required to have a certain amount of capital and avoid holding up the transfers of customer funds, the sources said.

Demand for international transfers of a large amount of money is growing, mainly from people who send money to their children studying abroad and individual e-commerce business operators.

The deregulation, if realized, would allow nonbank businesses to remit money swiftly at lower costs than through banks, said Hiroki Maruyama, who heads the Fintech Association of Japan.