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Beyond Swipe And Tap: Rewriting The Rules

Summary report by Kapronasia following a roundtable discussion which took place during the Japan FinTech Festival

13 May 2024 - The roundtable discussion on Beyond swipe and tap: Rewriting the rules - Can account-to-account payments revolutionise Japan’s financial ecosystem? brought together leading experts from banking, FinTech, technology and regulatory backgrounds to explore the current state and future potential of account-to-account (A2A) payments in Japan. The wide-ranging discussion surfaced several key insights and themes that will shape the trajectory of A2A in the years ahead.

Compared to markets like China and India where A2A payments via mobile apps have become ubiquitous, Japan has seen slower adoption. During the panel, legacy banking infrastructure, regulatory constraints, limited use cases beyond P2P payments, and a highly fragmented payments landscape were all cited as factors tempering growth. However, the confluence of recent FinTech innovations, changing consumer behaviours, and emerging open banking frameworks is creating new tailwinds for A2A.

Realising A2A’s potential in Japan will require addressing several enablers. Regulatory clarity around issues like liability for unauthorised transactions, appropriate transaction limits, pricing controls to keep transfer fees reasonable, and standardised API specifications can provide a stronger foundation for A2A innovations. Technologically, banks must accelerate the modernisation of core banking systems to enable real-time processing and API-based access to accounts. FinTechs and payment providers will also need to collaborate on interoperability standards to facilitate seamless money movement across proprietary wallets. Commercially, creative business models that link A2A payments to lending, commerce, and subscription services can create new revenue streams beyond transaction fees.

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