The Financial Services Agency plans to revise its guidelines on regulating the banking sector to demand stricter customer identity checks for account transfers related to electronic payment services, according to sources.
The move comes in response to a series of cases at banks across the country of fraudulent withdrawals via major mobile carrier NTT Docomo Inc.’s e-payment service.
The FSA is considering the guidelines revision as early as within fiscal 2020. It is aiming to prevent such fraud from reversing the current trend toward contact-free cashless payments, which are increasingly common in Japan against the backdrop of the coronavirus epidemic, the sources said.
Fraudulent withdrawals via the NTT Docomo service at Japan Post Bank and regional banks came to light in September. At the banks, the e-payment service was available through simple identification procedures.
In the wake of the fraud cases, the FSA told banks and e-payment service providers to suspend user registrations and fund transfers unless they tighten identification procedures, including through the introduction of one-time passwords.
The FSA is also expected to demand e-payment service providers take swift action if fraud cases occur to prevent affected customers from being worried about whether they could receive compensation.
A revision to a related Cabinet Office ordinance under the revised payment services law is eyed to oblige e-payment service providers to disclose fraud compensation policies in advance.