In 2016 the SBI Ripple Japanese Bank Consortium was formed, linking 15 banks. Today, it includes 61 member banks which include almost 80% of the Japanese banking assets.
A Ripple-based MoneyTap app will be launched soon, granting users unprecedented access to all the banks enrolled in the program.
It was previously known that the initiative was in the making and as the app was announced in March, it does not come as a surprise that it will be finally available to the general public. While the app is not yet available for download, the official website announces that it will be available in Autumn 2018 so it may appear before the end of November.
The app will initially offer access to three of the banks and the orders will be added in a slow rollout in order to test the app and prevent any major issues. The first banks are SBI Net Sumishin Bank, Suruga Bank, and Resona Bank.
If everything was out, Ripple will become the major leader of international money transfer from and to Japan in a matter of days.
The system comes as a serious improvement over more traditional money transfer methods, especially SWIFT. The transfer fees are also quite high in Japan, which is another inconvenience. The fact that banks often have different fees means that in some cases you have to take another trip to the bank in order to pay the extra cost.
MoneyTap will reduce the fees to a minimum and increase the speed of the transfers dramatically, allowing same-day transfers. As the market really needs it, the app will certainly be successful. While independent banks are also trying to find alternatives to SWIFT but none of them have the potential popularity of the app offered by the Japanese Banking Consortium.
Other competitors such as Western Union are already present in the country but they lack the digital reach needed to become alternative on a large scale. The fact that Japanese are very tech savvy should be a major hint for the competing services that if they won’t go digital, they will not make the cut.
Back on 2016 it was thought that Japans largest bank, MUFG, signed a deal with Coinbase. According to the Nikkei Asian Review, the main focus of the partnership is the development of a better alternative for SWIFT. It would seem that Coinbase envisions itself as a strong competitor of Ripple, which would also explain why XRP has not been listed on Coinbase and most probably it will never appear happen. Since then MUFG has joined the bank consortium so the initiative may have failed in the long run.
SWIFT has not been standing idle, as recent reports hint that the platform is aggressively aiming to integrate blockchain solutions. While this may boost the speed and convenience of the transaction, it would that banks themselves would have to spend time and money on developing the needed infrastructure, and they do not seem very enthusiast.
The money transfer fees are not excessive only in Japan. Depending on the sum, you may end up paying more the money you send for the privilege to send your money. Below you can find a case study.
Susan, a kind old lady, wants to send some money to her niece as a birthday gift. Since her niece is studying in New Zeeland, the only way to do it is to send them via bank transfer. Since Susan lives in Australia, she will opt for the services of the Commonwealth Bank since she trusts it.
According to the official fee schedule, for sending $50 she will have to pay the following taxes:
- A $30 fee for the transfer itself
- An additional 37 dollars if you want to pay the first fee on the spot instead of it being deducted from the money you send
- A $30 branch fee if you do not want to use the mobile app and go to a bank branch instead
Significant cost are present even if Susan decides to learn how to use the mobile banking app, and they would be around 36 Australian dollars (used in the case study).
At this point, Susan would be better of mailing the money and hoping for the best.