Wise Becomes First Money Transfer Operator to Complete Zengin Integration
Wise Payments Japan, the Japanese subsidiary of "Wise", which operates overseas remittance and payment services, has completed its connection to the "Zengin System", a little over a year after being granted approval, becoming the first money transfer operator in Japan to do so, enabling nearly instantaneous processing of domestic yen-denominated transfers.
The Zengin System is a system that processes domestic exchange transactions between financial institutions, such as bank transfers, online. Previously, participation in the Zengin System was limited to banks and similar institutions, but in 2022, eligibility was expanded to include money transfer operators, with Wise becoming the first money transfer operator to connect.
Additionally, Wise's connection to the Zengin System is via a newly constructed API rather than the existing relay computer system. It becomes the first money transfer operator to directly conduct current account transactions with the Bank of Japan via API.
Previously, when sending money through Wise, connections were made via "intermediary banks," but having more intermediaries increases costs and time. Direct connection improves transaction speed and reduces costs.
Furthermore, by connecting to the Zengin System, it becomes possible to verify recipient account holder names through the comprehensive ATM switching service. This supports secure transfers by confirming that recipient account name information matches bank records. It solves the issue of delays caused by mismatches in katakana name entries during transfers.
The benefits of Zengin System integration include "improved transfer speed," "recipient account name verification function," and "significant reduction in error rates."
Regarding transfer speed, domestic transfers are completed almost instantly. While specific numbers have not been provided, 74% of all Wise transfers arrive within 20 seconds. Wise is connected to 8 domestic payment systems including the UK (FPS), Europe (SEPA), Hungary, Singapore (FAST), and Australia (NPP), with transfers within 20 seconds improving significantly from 33% five years ago.
For example, in Australia, through direct connection with NPP, instant transfers improved from 24% to 83%. The main purpose of this initiative is to achieve the same in Japan through Zengin System connection. Additionally, international transfer fees are kept to an average of 0.52%.
With recipient account name verification, it becomes possible to confirm whether the recipient's account name is correct before executing the transfer. Money transfer operators not directly connected to the Zengin System don't have this function, and solving this is a characteristic feature of Wise.
Error reduction means that through advance verification of recipient information, payment errors and refunds are dramatically reduced. This also contributes to improved service operation costs, and future fee reductions are expected. While specific fee reductions cannot be announced as of the launch, Wise aims for continuous fee reductions based on the elimination of intermediary operators.
Norbert Gehrke
