Banks are stepping up efforts to lower money transfer fees. It is hoped that an appropriate fee system that suits the digital era will be introduced as soon as possible.
Five banks, including three megabanks, have announced that they will develop a new remittance system to lower money transfer fees. They intend to use a system called J-Debit services, in which customers can shop with cash cards.
They said that they will call on regional banks and smartphone payment service providers, among others, to join the project.
As there has been criticism that banks' money transfer fees are relatively high, it is reasonable for banks to make efforts to lower the fees.
The new system, however, is designed for small remittances of tens of thousands of yen or less between individuals, not for high-amount payments.
To carry out drastic reforms, it is essential to review the operation of the existing interbank payments system, called the zengin system.
Nearly all Japanese financial institutions are connected to the zengin system. The remittance charges between banks are set at 117 yen for remittances of less than 30,000, yen and 162 yen for remittances of 30,000 yen or more. The fees have not changed for more than 40 years.
The problem is that the basis for the interbank remittance charges is unclear.
The zengin system is said to run up costs because it allows instant payments 24 hours a day, every day, and provides more stable services. But the banking industry, which operates the system, has not made the breakdown of the costs clear.
In April, the Fair Trade Commission compiled a report calling for rectification of remittance charges between banks, saying that such charges far exceed clerical costs. The long-standing practice should be rectified and the charges should be lowered.
Each bank determines the amount of money transfer fees for customers by adding up related costs plus a margin for profit to remittance charges. For example, when 30,000 yen or more is transferred over the internet from a major bank to another bank, the total amount fees are 440, yen including tax.
With the introduction of information technology, the amount of clerical work at customer service counters has decreased, and labor-saving in services has been accelerated. There is a lot of room for a reduction in money transfer fees as well as remittance charges. It is important to gain the understanding of users.
It has also been pointed out that money transfer fees remaining at a high level hinders the spread of cashless services.
Smartphone payment service providers, such as PayPay, use bank transfers to make payments to participating businesses, which becomes a heavy burden for them. This is because small payments are frequently made.
In this year's growth strategy, the government has cited as a priority issue newly establishing a low-cost payment system that can also be used by IT companies. The cooperation of banks is needed for that purpose.
Cashless payments can reduce the bother of cash management, among other benefits. Hopefully, banks will facilitate reforms that are conducive to the reduction of burdens on users and the promotion of streamlining of the entire economy.
-- The original Japanese article appeared in The Yomiuri Shimbun on Aug. 26, 2020.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
