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Transcript of Payment System
PAYMENT SYSTEM Summary Type of Customer payments systems Interbanking payments
Institutional aspects Characteristics of Payment Practice Cash Checks, promissory notes and bills of exchange Direct credit Direct debit CD/ATM Internet banking / mobile banking CASH The most widely used form in Japan
The means of payment Checks, promissory notes and bills of exchange Mainly used for corporate payments The number of transaction has
been declining Direct Credit First credit card company was established in 1950.
End of March 2011, total issuance of credit cards was 322 million. Direct Debit Predominant instrument.
The paying of bills. CD/ATM Aggressively installed since the mid-1970s.
Outside of banks such as at retailers
open 24 hours. ATM
with Cash Cards Customers use a plastic card that identifies their accounts and deposit.
Financial institutions have installed since 1969.
154’960 CD and ATM and 484 million cash cards have been issued.
Cash cards have multiple magnetic stripes. Ordinary account
Credit account Internet banking/mobile banking Simple web text interfaces in 1999.
Customers can check balances or transaction records of their accounts.
85% banks in Japan offer mobile banking services.
50 million customers.
Value-added service with innovation in technology such as Smartphones. THE INTERBANK PAYMENT SYSTEM Clearing houses Zengin system Foreign Exchange Yen Clearing System BOJ-NET Shared ATM Networks CLEARING SYSTEM Bills and cheques.
Financial institutions of the same geographical area.
First - Osaka in 1879.
Tokio 1887 – now 70% of the total value. Zengin system Japanese Banks’ Payment Clearing Network.
Domestic Fund Transfers. Transaction - 08:30 and 15:30 .
Salaries and pensions, and payments. April 1973 FXYCS Foreign Exchange Yen Clearing System Established in 1980.
Yen cross-border financial
Same-day settlement service. 28 institutions (direct), 179 institutions (indirect)
and CLS Bank
Transactions / day: 25,840 (2011).
Clearing value/ day: JPY 11.5 trillion (2011).
Owned by TBA and operated by BOJ. BOJ-NET Bank of Japan Financial Network System Established in 1988.
Funds transfers (Current accounts).
Yen settlement (Foreign Exchange).
Government-bonds services. 473 Institutions.
Transactions / day: 52,781 (2011).
Clearing value/ day: JPY 101 trillion (2011).
Owned and operated by BOJ. Shared ATM Networks First ATMs introduced in 1969.
MICS (Multi Integrated Cash Service) established in 1990.
Cash withdrawal services, cash deposit, credit transfers and loan processing, ...
9 major online networks relayed by MICS. 1,916 financial institutions.
111,392 CD and ATM (154,960 in total in Japan).
Transactions in 2011 : 290 million.
Value in 2011: JPY 13.7 trillion. Regulatory framework Postal savings, postal giro and postal money
Prepaid cards (electronic money)
Bills and Cheques
Bank notes and coins Posted Giro Law and Postal Money Order Law Prepaid Card Law Cheques Law
Bill Law Bank of Japan Law
Unit of Currency and Issuance of Coins Law Legal basis
for securities Law Concerning Book-entry
Transfer of Corporate and
Other Debt Securities
Civil Code Commercial Code Financial
Institutions Law Concerning Closeout Netting of
Specified Financial Transactions Entered CENTRAL BANK
Carry out currency and monetary.
Ensure the smooth settlement of funds among banks an other financial institution.
Contributing to the maintenance of an orderly financial system. Objectives "Japan's payment system has been constructed around the
Japanese citizens' strong preference for using cash as a
means of payment." 1) Developed electronic payment means 2) High penetration of ATMs 3) Expanding supply channels