London-based fintech firm TransferWise announced its launch into the Japanese market on Sept 8, as the newest company to transfer money internationally. Using peer-to-peer technology and without any hidden charges, TransferWise says sending money abroad is up to eight times cheaper compared to using a bank. Whereas banks in Japan charge anywhere between 2 and 10%; and the service takes 2-5 days; TransferWise applies real market exchange rate and charges around 1% of the transaction which only takes 1-2 days. The start-up is growing each day offering 645 routes, serving 38 currencies, to 60 countries.
TransferWise Japan was established in June 4, 2014, and currently offers interface and customer support in a total of nine languages (English, French, German, Hungarian, Italian, Japanese, Portuguese, Russian and Spanish). Japan represents a key market for TransferWise, and the company said it is dedicated to offering people here with a new and fairer way to transfer money across continents and currencies. There are 1.31 million Japanese people living abroad and 2.23 million people from overseas who represent potential customers.
Heading up the Japan operations is Kazuma Ochi who has a background finance, marketing and technology.
How did you get involved in TransferWise?
I joined last November. I was aware of TransferWise and that it was a fintech company wanting to open an office in Tokyo and I was interested. We chatted over Skype and here I am. I understand the risk of new businesses and this area is a very established business here. In Japan, as you know, banks are very powerful. But I have a background in finance, marketing and technology, so I thought this would be an ideal challenge.
It is a competitive market. What is the advantage of using TransferWise?
We use peer-to-peer technology and without any hidden bank charges. For instance, if Person A wants to to send money to person B in the UK, he or she pays the yen amount into TransferWise’s local Japanese bank. TransferWise automatically matches the yen-to-pound transaction with other users who wants to send the same amount in the opposite direction. It crowdsources other users’ pounds to person B in the UK. Person B then receives the pounds in the UK through a local transfer from TransferWise. In this way, money is never moved abroad and bank exchange fees are eliminated entirely.
How does a user get started?
To use TransferWise, you go to our website and open an account with us. To comply with Japanese regulations, you will have to submit your ID and My Number. Then we will send you a document in order to verify that you have a real address. You receive a letter with an activation code. You enter that on our website and you are ready to send money. You do a "furikomi” (transfer) from you bank to our bank and we do the rest. The charge in most cases is 1%, depending on the currency. The transfer on average takes one or two days. The transaction is processed and a final notification is sent when the payment has been completed. Most importantly, we apply mid-market rates and don’t charge recipient or medium bank fees so you won’t be hit by an unwanted surprise.
Can users transfer money online?
Yes, customer can access our website via PC, tablet or smartphone. Also, our mobile app should be ready to roll out from October.
Who are your target customers in Japan?
At first, primarily foreign residents wanting to transfer money to the UK, U.S., Australia. We offer service in nine languages and the next big target segments will be Filipinos, Brazilians and Vietnamese. We also have some Japanese customers who want to send money to their children studying abroad.
What is the limit per transaction?
One million yen per transaction from Japan to abroad.
How do you prevent money being transferred for illegal purposes?
We have an international and local compliance department. There is also a country sanction list, so we do nothing with North Korea or Iran, for example. We are also able to analyze patterns of transactions.
Since you have just launched in Japan on Sept 8, how are you planning to market TransferWise?
We believe quality of service is the most important and we are looking to improve our service to fit into local demand. For example, in Europe and U.S., most of our users come on a word of mouth basis. We will do more online marketing and we will look into having booths at international school festivals and various countries’ festivals at parks, which are very popular.
When you are not working, how do you like to relax?
I like to play golf, go surfing and camping in Chiba.© Japan Today