Photo: REUTERS file
business

Little-known fees help Japan's trust banks dominate profitable niche market

21 Comments
By Makiko Yamazaki and Maki Shiraki

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21 Comments
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"It's not right to charge 2,000 yen for doing nothing. Any way you look at it, it's a barrier to entry and in violation of anti-trust laws," said one executive at a major manufacturer. He and other sources declined to be identified because the information isn't public.

Anyone who has rented property in Japan knows the feeling. Key money, cleaning and depreciation fees.

In one sense it is looking back towards feudal domination by landed and financial classes who viewed the populace as a resource for tithes and taxes and fees. But now with successive crises like the 2008 banker bailout and the pandemic we are seeing this massive wealth transfer to a small rentier class worldwide.

14 ( +14 / -0 )

This sort of anticompetitive practice is an area where the government SHOULD be involved.

And where the heck are they? They been wined and dined with fancy dinners to make them look the other way?

the lender slapped it with a roughly 400 million yen termination fee

Come on... 2,000 yen per data record transferred is ridiculous, in 2021

13 ( +13 / -0 )

Another executive, at a midsize listed firm, said his company refused to pay when switching transfer agents years ago.

"There was no clause for specific break fees in our contract but the bank demanded it, saying it was an industry custom," the executive said. "I told them it doesn't make sense."

His company never paid the fee and the bank gave up trying to collect it, he said.

There you go. It's not legally binding so you tell them to get lost.

13 ( +13 / -0 )

Almost no one likes his / her cable or Internet provider. The same pretty much goes for banks. Why? High fees and poor service (AKA paying for nothing). For foreigners in Japan banks would rather not deal with you. I can go to my city office and comfortably conduct business in English. But, if I go to the bank branch inside the city office they require that I fill out all documents in Japanese. And, they will not help or make any mark on the forms for me. I can not even make a deposit without being able to write in kanji. For years I have transferred money to and from my Japanese bank account vire wire transfer. They have always been unable to accurately tell me the fees prior to the transaction. Suddenly this year wire transfer fees jumped by 8,000 JPY with no notification. I threatened to close my account and they seemed eager to do it. No wonder Japan is still a mostly cash society.

12 ( +12 / -0 )

Ah, Japanese banks and companies. Hidden fees, termination fees, fees for things like withdrawing money outside the "business hours".

Does anyone remember some senior politician saying around 2005 that such fees will be dropped?

It's 2021 and I can't still transfer money from one of my JP account to another JP account during the weekend or holidays. It's like if there was an actual person taking the money from the original account and physicaly depositing the money into another account. And considering the fees, maybe having a coffee on the way between the banks.

Or when transfering money during the business hours, it's not instant if it's not the same bank. It takes several hours, mostly it takes place the next morning.

The banking system is so archaic here. Even the cash card and bank books nonsense. I have to carry two cards despite one card can do the job. I can't withdraw money from JP ATM with my credit or debit card, I must use cash card. But abroad, my credit card or debit card work for withdrawing, the cash card does not work. Why make things easy if they can be done the difficult way.

9 ( +9 / -0 )

All is done to make it hard in order for politicians to get their part of revenues. All is rigged from the start.

Even at shinsei bank, international wire transfer was so difficult to make by having to go first time at the branch for any new bank account you wished to transfer to.

Medieval times ongoing.

Banks are so a ripoff and peasants are pleased with a 0.001% interest rate. I don't understand

8 ( +8 / -0 )

"There was no clause for specific break fees in our contract but the bank demanded it, saying it was an industry custom," the executive said. "I told them it doesn't make sense."

Just like key money and the one month rent fee to print out a new lease. All customary, but few if any Japanese people challenge these expensive, archaic customs, so we all get to continue to pay.

You know, because this is how we’ve always done it and we don’t want to cause waves.

8 ( +8 / -0 )

For foreigners in Japan banks would rather not deal with you. I can go to my city office and comfortably conduct business in English. But, if I go to the bank branch inside the city office they require that I fill out all documents in Japanese. And, they will not help or make any mark on the forms for me. I can not even make a deposit without being able to write in kanji

Well, we are in Japan, nothing wrong with using Japanese and only Japanese. How long have you been here ? It just takes a few efforts to learn the language and deal with. Some internet websites do certainly help.

For foreigners, if you speak the language, then have a PR visa and stable revenues, banks will deal with you.

-3 ( +1 / -4 )

This is business. Mitsubishi UFJ paid the 400 million yen fee in order to pick up a large and important client. They must have decided it was an acceptable financial cost in exchange for what they would get out of it. And there must have been a reason that Honda would drop Sumitomo Mitsui.

Sumitomo Mitsui should understand that if you kick your former clients in the arse as they are leaving, there is very little chance you will EVER regain their business.

0 ( +1 / -1 )

Why do I always have the feelings that in Japan you can't even fart without paying , I remember once I was charged 3,000 yen to get a copy of my rent contract from a realtor, when all the clerk did was just copy it which will normally cost 10 yen per sheet

3 ( +3 / -0 )

"It's not right to charge 2,000 yen for doing nothing. ""

SMBC bank charges 2,000 JPY per month just to keep your account, unless you keep 500,000 jpy or $200,000 USD balance in the account!? this is also paying someone for doing nothing.

4 ( +4 / -0 )

To Richard Burgan,

I understand your frustration, have you tried Transfer Wise, check them out. very cheap and super fast all online. I started using last year without any problems so far.

1 ( +1 / -0 )

Punish the "big" japanese banks by STOP using them.

There are ways to do almost everything with no fees, like its on the rest of the world.

Switch to an online bank. Rakuten bank, Sumishin SBI Net Bank or Sony bank are some examples. They all provide some free deposits per month (depending on your amount you keep on your account) from almost all convenient stores. No need to search for your bank's ATM next to you. There is always a conbini around. No need to check what time it is.

You can get free transfers. Again the number depends on your account size, but its possible. You can even use multiple online banks to take advantage of each one of them.

They all use apps so you get instant updates and mobile banking.

As mentioned, use (Transfer)Wise for international transfers.

You only need to search a little bit and you will never have to pay any of their ridiculous fees.

Ever since I have changed I have never missed any service from the traditional banks and I am smiling inside everytime I pass in frond of real bank that I dont need to enter there again.

I am sure that most japanese will not search/change, but I have seen many young people recently changing.

3 ( +3 / -0 )

I have an account with SMBC and withdraw ALL my salary from it the same day it goes in.

I have also found ways to stop using the over inflated system here...

1 ( +1 / -0 )

I don't get all the complaints here. Does nobody ask questions or research fees BEFORE opening accounts with these banks? I have accounts with Shinsei, SMBC, Suruga, MUFG, and Mizuho and have no complaints.

-4 ( +0 / -4 )

@Mark - have you tried Transfer Wise, check them out. very cheap and super fast all online. I started using last year without any problems so far.

Had an inbound payment through them last year. Took two weeks to process, and I had to provide the Japan Central Bank as well as my own bank a lot of evidence w.r.t. to the payment, details of payer+payee, invoices, addresses, websites, etc.. They thought it was money-laundering!

0 ( +0 / -0 )

I use Transferwise and works very fast and cheaper than Swift.

0 ( +0 / -0 )

Last week MUFG sent me a form to fill out. I had to explain why I had a bank account and what I use it for. When I phoned they said it was for non Japanese only.

0 ( +0 / -0 )

@Mark, Recall you & @Zichi and some related comments 10p Feb 28. but don’t see them anymore. One commenter here also mentions ‘accounts with Shinsei, SMBC, Suruga, MUFG, and Mizuho’. Interesting thread then but now gone. Maybe relevant here today to repost.

0 ( +0 / -0 )

@snowymountainhell

My comment is still here and viewable.

0 ( +0 / -0 )

This is precisely why Japan will fail to become a financial hub like Hong Kong or London.

0 ( +0 / -0 )

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