New legislation (its proposal draft[J]), which allows nonbanks to deal with payments and money transfers, was approved by the Lower House of Japan today. It will accelerate competition in reducing remittance charges among banks and potential service agents in this market.
In order to protect consumers from damages caused by possible bankruptcies of remittance agents, the government will set upper limit per transaction between 500,000 and 1,000,000 yen after the examination.
When buying something good at e-commerce shops in Japan, we’re usually allowed to pay for it by credit card, C.O.D. (cash-on-delivery) provided by courier operators, bank transfer and postal money order. Some shops can accept pre-paid point card systems such as WebMoney[J].
The legislation, which is defined to be effective in a year since today, will enable nonbank companies to get new business opportunities providing the Internet users with easier-to-use and cost-effective money transfer services, that’s why PayPal is reportedly expecting to set up a new service specifically designed for Japanese e-commerce market. U.S.-headquartered Western Union, which is famous for providing foreign workers with P2P money transfer service requiring no banking account, is also considering full-scale market entry in the near future.