Many people feel that money transfer fees at banks are rather expensive. Banks need to revise their old business practices and reduce the burden on customers.
The Fair Trade Commission has compiled a report calling on the financial sector to substantially lower remittance fees between banks. It said, “Efforts should be made to correct the current situation, in which the fees have stood at a high level far above administrative costs for many years.”
Remittance fees are determined by negotiations between banks. They should be different at each bank, but they have remained the same across the board for more than 40 years. It is reasonable that the FTC aims to urge them to review their persistently high fees.
Remittances between banks are made through a dedicated payment network called the zengin system. Around 6.8 million transactions are processed per day on average, and the report estimates the cost to be several yen per transaction.
However, the fees are set at ¥117 for remittances of less than ¥30,000 and ¥162 for remittances of ¥30,000 or more. Given this, it is no wonder the appropriateness of the fees is in doubt, even though it costs a certain amount of money to maintain a secure and convenient system.
The banking industry has embarked on consultations about the remittance fees with a view to reviewing them next spring. It is only natural that it has begun moving toward reforms.
If the remittance fees between banks are lowered, the transfer fees that customers pay to banks can surely be lowered, too.
It is also important to clarify the basis for the calculation of the fees. Banks must strive to improve transparency as companies that have a social infrastructure role.
This is likely to help promote the spread of cashless payments as well.
QR code payment service providers, such as PayPay, also use bank transfer services to exchange money with their member stores. If transfer fees are lowered, the burden on these companies will surely be lightened.
When people use QR code payments, they charge their smartphone — essentially depositing money into it — often from their bank account. At that time, payment service providers pay charging fees to banks, which has also been cited as a challenge.
The FTC pointed out that “there have been cases in which a fee was presented that clearly greatly exceeded the revenues of the payment service provider,” and warned that “it may be problematic under the Antimonopoly Law.” The financial sector should take this seriously.
Encouraging information technology companies to diversify their financial businesses is in the interest of customers. However, banks’ profitability has declined because of prolonged ultra-low interest rates.
In foreign countries, there are some examples of financial institutions charging lower fees for money transfers, instead of charging fees for maintaining accounts. It is important for both the public and private sectors to deepen discussions on what the fees should be.
— The original Japanese article appeared in The Yomiuri Shimbun on May 12, 2020