The Japan Fair Trade Commission (JFTC) has compiled a report which says the elimination of fintech business operators, which combine finance and information technology, from the banks’ payment infrastructure could violate the Antimonopoly Act. The commission issued the report in a bid to change the status quo in which banks dominate the payment infrastructure and create an environment for promoting new services. The commission also sees the long-standing fees for money transfers between banks as problematic in terms of competition policy and will call on banks to rectify the practice. The commission is poised to take drastic measures to change industry practices to improve convenience for users of financial services.

The JFTC will release the report soon. It has been conducting surveys on the transaction environment surrounding fintech business operators since autumn 2019. To clarify the problems, it sent questionnaires to and interviewed a fintech service provider that operates a personal financial management app as well as banks and financial institutions.

The JFTC first focused on the “Open API” system, which allows fintech companies to access banks’ core systems. If banks and fintech companies cooperate, users will be able to view their bank account balances and make payments via personal financial management apps. The report warns that if banks unreasonably refuse to allow service providers to connect to the system, they could be in violation of the antitrust law. (Abridged)