A year ago, a new shikin kessai-ho (funds settlement law) went into effect with regard to foreign currency exchange, and as a result it is now legal for almost any financial institution to offer overseas money transfer services. Previously, in Japan only Japanese banks could offer this service, and anyone who has tried to wire money overseas through a bank will understand why a new law was needed. Besides charging sizable handling fees (tesuryo) for sending the money on top of an exchange fee, banks seem to take forever to make it happen.
Make that to go: Travelex window in Ueno Station
Western Union, the legendary telegraph company that provides international money transfer services in 240 countries, applied in Japan last July for permission to provide overseas remittances. The company presently commands an 8 percent share of the money transfer business in Asia, and its revenues have been decreasing every year since 2006, so Japan is seen as a vital opportunity. The service would specifically target foreign workers who regularly sent money back to their home countries, a market that will only grow as Japan inevitably allows more foreigners to work here and which Japanese banks have mostly ignored, at least until now.
Many foreign workers in the past used non-profit organizations whose intentions were above-board but which nevertheless operated in a legal gray area. Japanese banks tend to charge at least ¥4,000 to remit funds overseas, no matter how small, which is OK if you’re sending money once a year, but many foreign workers send money once a month. And since the bank is usually sending the funds to an unaffiliated financial institution, that institution charges the Japanese bank a fee, too, which the sender usually has to pay. With Western Union, it’s the same company on both ends of the transaction, so there’s only one fee.
WU has hooked up with the British currency exchange service Travelex, which already has outlets in six prefectures. Fees range from ¥990 for sums under ¥10,000 to ¥12,000 for remittances between ¥500,001 and ¥700,000, which is the maximum amount that WU Japan will transfer per transaction. (According to the Funds Settlement Law, you still need to use a bank to transfer funds of more than ¥1 million.) Better yet, the transfer is instantaneous, while it normally takes a bank several days to send your money. The Asahi Shimbun has already reported on how popular the service is among foreign workers and students in Japan.
Naturally, other companies are now entering the ring. Japan Travel Bureau and the SBI Group have started overseas remittance services that are actually slightly cheaper than WU’s: ¥880 for amounts of less than ¥30,000. Until the end of March, SBI even offers a special low fee of ¥1,980 for remittances over ¥250,000. Services other than Western Union’s, however, usually charge different fees depending on the country of destination. In addition, Rakuten Bank has also started a remittance service in January with Travelex, but only for businesses. Seven Bank, the ATM banking service connected to 7-11, has partnered with Western Union and this summer will begin offering money transfer services overseas through its system of 14,000 ATMs. SBI will offer a similar service through ATMs in Family Marts and branches of Japan Post’s Yucho Bank. Though they’ve been slow to acknowledge the new competition, Japanese banks are starting to stir. In November, Sumitomo Mitsui Bank started offering a 24-hour money transfer service over the Internet whose fees are ¥500 less than what they are if you make the transfer at a branch office. All transactions made through ATMs or over the Internet require pre-registration and documentation of email addresses and identification.