Japan Banks Push for Round-the-Clock Mobile Transfer Access
Banks have long had a bit of a struggle in the mobile payments market; the rapid pace of advancement here was better suited to technology firms than to banks, who often have institutional provisions against risk. However, banks in Japan—three of the largest—are working to set up a new peer-to-peer (P2P) mobile payment system that uses mobile phone numbers for a base.
Built around blockchain technology—the same system that’s incorporated into many cryptocurrencies—the new system allows users to establish virtual accounts as part of current deposit accounts. Users can then route cash from the deposit account to the virtual account and then disburse the cash accordingly. Three major banks are involved in this development: Mizuho Bank, Sumitomo Mitsui Banking and Bank of Tokyo-Mitsubishi UFJ.
The new system will be available round-the-clock, reports note, and will offer substantially lower fees for making transfers take place. Interestingly, Japan has proven a laggard on this front, particularly as compared to Africa, where peer-to-peer payments connected to mobile devices have been on a tear lately. The Japanese, however, are making more deliberate advances, including pulling in blockchain technology to make the payments more secure and safer to the end user.
Interestingly, this new system doesn’t call upon the Zengin System, a major national initiative geared toward mobile payments. Operated by the Japanese Banks’ Payment Clearing Network, it’s also know for having substantial fees connected to it. With Zengin, the cost to send 30,000 yen—about $268 as of this writing—is just over 400 yen, or about $3.57. With the new system, those fees will be slashed down to “a few dozen” yen or maybe less.
Even assuming a “few” is “seven,” we’re still talking better than 75 percent off. Such a move would be welcome for the banks and their customers alike; the customers get access to desirable services, safely and with lower fees. The banks get to offer these services and get out from under the PR cloud of higher fees and general customer disgruntlement. Plus, they get to assert control of a market that hasn’t really taken off; Japanese banks haven’t seen a lot of movement in mobile payments yet.
It’s a good move all around; the sooner this new system can get in play, the better for all concerned.