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According to Market Intelligence, April 2023

Japan's antitrust watchdog investigating interbank transfer fees

Japan's Fair Trade Commission is investigating whether fees charged by the country's interbank funds transfer system are hindering the entry of newcomers, such as financial technology companies, The Nikkei reported Dec. 7.

The watchdog is looking into how banks decide transfer fees and how payment operators connect to Japan's nationwide network, Zengin, which enables banks to make domestic funds transfers online.

Currently, new operators that want to join the Zengin system are subject to approval from the Japanese Banks' Payment Clearing Network, which operates Zengin, and must pay hefty fees upon entry. This makes joining the network difficult for fintech companies without cash buffers, the publication reported.

Due to the difficulty in joining the Zengin system, fintech companies and other payment service operators transfer funds via personal bank accounts, incurring fees for interbank transfers, as well as paying for charges to move money into and out of accounts, making it harder to enter the payments business.

As part of the Fair Trade Commission's investigation, it is surveying major banks and fintech companies that handle payments, and is looking to finalize a report by March 2020.

The Japanese government is also looking at allowing fintech companies that meet certain standards to connect to the system, as well as making efforts to reduce fees, the publication reported.