You can see the rules and regulations in other jurisdictions.
Prior to 2017, Japan did not have any regulations for services in which operators act as representatives of customers - e.g. issuing instructions for bank transfers and obtaining account info. But, as of 1 June 2018, Japan's Banking Act demands that electronic settlement agents must be registered before they can carry out these types of services on behalf of customers. This regulatory framework is similarly structured to the ones established by the EU Payment Services Directive for payment initiation and account information service providers.1
Non-banks must register or notify for certain payment services, such as fund transfers, e-money and gift vouchers, credit card issuance and acquirer/PSP operations. May 2021 saw the implementation of revised Payment Services Act (PSA) which categorised remittance service providers into three groups; Type I requiring approval, and Types II and III needing registration only. This allows different levels of fund transfer provision based on the amount transferred.1
For non-banks to engage in certain types of payment services, such as remittances (fund transfer transactions), prepaid payment instruments (e.g., gift vouchers and electronic money), and credit purchase intermediation (e.g., issuance of credit cards), registration or notification is required.1
According to the amended PSA, which came into effect in May 2021, transfer service providers are divided into three types: Type I requires approval, Type II requires registration, and Type III requires authorization. In Type I fund transfers, authorised providers are permitted to transfer more than $1 million in funds. This type of service meets the needs of overseas remittances. To protect customers in the event of bankruptcy, providers are generally forbidden from retaining customer funds or accepting funds without specific instructions. Type II fund transfers maintain the framework of previous fund transfer services: transfers of $1 million or less can be made via a single remittance instruction. Providers can handle transmittances and customer accounts up to $50,000 with Type III fund transfer service, whereas segregated accounts are permitted, but provide fewer safeguards for customer assets.1
In June 2018, the amendment of the Instalment Sales Act (ISA) initiated a requirement for credit card issuers to be registered as ‘comprehensive credit purchase intermediaries’, regardless if physical cards are issued. Conversely, PSPs that initially examine whether to conclude merchant agreements are exempted from registration, as long as an acquirer takes the decision to finalise such agreements and operations are limited. Those offering such services have obligations for appropriate customer credit card number management.1
The amended ISA, effective as of April 2021, accounts for a variety of payment services and providers in line with the evolution of payment technology. This includes less stringent registration requirements for services offering small sums (up to ¥10,000) of post-payment services. Furthermore, it enables credit card issuers to leverage more advanced screening techniques to assess customers' repayment capabilities through their collected data. Moreover, this amends the act by necessitating broader services like QR code payment service providers to securely store customer credit card details.1
