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Japan Post Bank will scrap its cashless payment card service due to major security flaws and launch a new service around spring 2022, its President Norito Ikeda said Friday.

Ikeda also announced that he will voluntarily return 10% of his monthly pay for three months to take responsibility for fraudulent transfers of customer deposits using the service, known as mijica.

“We apologize to our customers for causing inconvenience and trouble as we failed to conduct customer-oriented operations, including those related to compensation payment,” he said.

To take responsibility, four other executives of the Japan Post Holdings Co. unit will also return part of their remuneration.

Until the launch of the new service, the bank will offer the mijica service with available card functions that have proven to be safe, including its use as a debit card.

In addition, it will resume customers’ money transfers to Merpay and Line Pay on Wednesday. It will also enable money transfers to other partnered payment service systems, such as Docomo Koza by NTT Docomo Inc., in stages.

The bank noticed the first fraudulent money transfer in summer 2017. It did not, however, start taking proper steps security measures or offer compensation until autumn 2019.

“I was informed of individual cases but I wasn’t able to grasp the whole picture,” Ikeda said.

Ikeda revealed plans to start building a one-stop system to receive complaints and inquiries this month and to strengthen its senior officials’ commitment to work to pay compensation and respond to complaints.

The bank had compensated for confirmed losses totaling ¥52.77 million across 230 cases as of Thursday.

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