News Wise becomes first foreign company to join Japan's payment clearing network

We have used Wise several times for international remittances. I'm with Shinsei, and their fees are ridiculously high (in addition to an abundance of paperwork to prove that your funds are not used to support international terrorism or the DPRK). This move will put a lot of pressure on Japanese banks:


British fintech firm Wise has made history by becoming the first foreign financial company to gain direct access to Japan's bank payment clearing network. This move could shake up the competitive remittance market in Japan, putting pressure on banks like Mitsubishi UFJ, SBI Shinsei, and Sony Bank. Traditionally handled by banks, cross-border payment fees have declined but remain relatively high. Japan, in particular, has the highest average cost for sending USD200 among G7 countries, reaching 6.94% in the first quarter of 2024. The demand for remittances in and out of Japan is substantial, with total transactions reaching a record JPY1.54 trillion (USD10.3 billion) in the 2023 financial year, a 14.4% increase from the previous year. Wise's direct access to the clearing network could offer a more cost-effective alternative for consumers and businesses looking to send money abroad.

Wise said access to the "Zengin" system will allow it to bypass intermediary banks that process and settle funds in Japan, lowering fees and processing times. The company, whose services include consumer remittances, business accounts and provision of its backend payments infrastructure to financial institutions, says the average fee for its cross-border transactions globally is 0.59%. It most recently posted a 20% rise in quarterly cross-border volume. In the 2023 financial year, it moved around 120 billion pounds in total, making up 5% of personal remittances and 1% of small and medium business remittances globally.

Click to expand...

This is a big deal!

I'm not sure how different it is from the way Revolut, another British fintech, operates in Japan. But I do know that Japanese residents have been able to open bank accounts with Revolut since 2020. Both Revolut and Wise allow users to send money to any country in the world for free (instant payment). This is not just to other Revolut and Wise account but to any bank account.