Regional banks plan to enhance customer service by introducing as early as summer a smartphone app for making person-to-person remittances.
By using a money transfer system to be introduced by megabanks this year, the remittance fees charged by regional banks -- including the Bank of Yokohama and the Bank of Fukuoka -- will be lower than those charged for their online banking services or be made free of charge. Remittance amounts will be capped at 100,000 yen.
Faced with competition from smartphone payment services such as PayPay that also handle person-to-person remittances, the regional banks will enhance convenience for users.
Four other regional banks are also embracing the new service: Shizuoka Bank, Kumamoto Bank, Osaka Prefecture-based Kansai Mirai Bank and Nagasaki Prefecture-based Juhachi-Shinwa Bank.
Users will have to download the app and register their smartphone number and email address. Remittances will be able to be made anytime. Currently, the Bank of Yokohama charges a 330 yen fee, including tax, for remittances of 30,000 yen or more to an account at another bank.
More than 50 other regional banks, or more than half of the regional banks across the country, are considering taking part in the service.
Remittance fees are expected to be lowered or abolished because the participating regional banks will use a small-sum settlement system developed by a company jointly owned by the five megabanks: MUFJ Bank, Sumitomo Mitsui Banking Corp., Mizuho Bank, Resona Bank and Saitama Resona Bank. The company, called Kotora, plans to start offering the system as early as next summer. By capping the remittance amount at 100,000 yen per transfer, it is said that costs can be cut significantly.
Banks currently use the zengin system (data telecommunications system of all banks) for person-to-person remittances, just as they do for business-to-business remittances.
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