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Wise has received a coveted regulatory approval in Japan, becoming the first non-bank firm to gain direct access to the country’s domestic payment system.
On Friday (October 18), Wise that after eight years in operation in Japan, it has been granted approval to join Zengin, the country’s domestic interbank network.
The money transfer company said the approval is the first step towards being able to process payments in real time and without any intermediaries in Japan.
Once connected to Zengin, Wise will be able to provide instant cross-border payments to and from Japan for individuals and businesses, completing transactions in under 20 seconds.
Previously, access to Zengin was limited to Japanese deposit-taking institutions. However, following a review in 2022, the Zengin board adopted a new policy that allows non-banks to join the network.
Mika Sei, country manager for Japan at Wise, said the approval is a testament to Wise’s continuous engagement with regulators and policymakers in Japan.
“Today’s approval to join the Zengin system reinforces our ongoing commitment to the Japanese market and our ability to meet the highest standards of regulatory compliance,” she said.
“We are continuing to execute with speed on our mission of money without borders — but in some ways, we are just getting started.”
Access to Zengin is not the first time that Wise has secured a rare regulatory approval in Japan.
In March, Wise became one of the first international companies to be a licence in Japan as a Type 1 Funds Transfer Service Provider.
Previously, Wise was subject to a transaction limit of ¥1m ($6,600), but under the new licence, both individuals and businesses in Japan can send and receive up to ¥150m ($1m) in more than 40 currencies.
Earlier, in May 2023, Wise its first integration in Japan with GMO Aozora Net Bank, a neobank with more than 80,000 corporate customers.
GMO Aozora Net Bank is Wise’s fifth banking partner in Asia alongside Hong Kong's ZA Bank, Indonesia's Bank Mandiri, Singapore's Aspire and South Korea's Shinhan Bank.
The importance of direct payment system access
Speaking with žž, a Wise spokesperson said that direct access to domestic payments infrastructure is crucial for delivering instant, cheaper transfers, and for ensuring end-to-end control of each transaction.
Wise has already connected directly to five domestic or regional payments systems in other markets, namely the UK, Europe, Hungary, Singapore and Australia.
This infrastructure currently enables around 60 percent of all Wise transactions to be processed in under 20 seconds, with average fees of 0.62 per transaction.
Wise joined the UK’s Faster Payments in 2018, and is covered in the French, German and Italian markets by the EU’s 2024 Instant Payments Regulation (IPR).
Brigit Carroll, senior policy and campaigns manager at Wise, has noted that Canada and the US are the only G7 markets where Wise is yet to gain approval to connect directly with domestic payments systems.
In Canada, this could soon change as a result of new amendments to the , which came into effect last month.
Under the new regulation, registered payment service providers (PSPs) will be able to connect directly with Payments Canada systems from 2025 onwards.
In the US, however, only deposit-taking institutions can access Federal Reserve payment systems.
