Japan’s Higo Bank is the latest local financial institution to join the network of Ripple-based payments app MoneyTap.
Japanese finance giant SBI Holdings announced on Sept. 1 that Higo Bank invested in and added support for MoneyTap—the payment app that SBI jointly developed with Ripple.
MoneyTap is a mobile payment application meant to tackle the high cost of interbank money transfers in Japan. It also enables 24-hour settlement, as which are limited to traditional bankers’ hours in what SBI called Japan’s “existing rigid settlement infrastructure.”
Noting that the “high interbank fees in Japan are a special situation internationally,” Higo said that “[b]y providing the next-generation financial infrastructure, MoneyTap will contribute to the revitalization of economic activities and the improvement of international competitiveness.”
Reuters reported in April that the local fees are so high that Japan’s FairTrade Commission said local banks need to reconsider them, adding that they have not changed for more than 40 years. All Japanese banks set 117 yen ($1.10) for transferring less than 30,000 yen ($280) and 162 yen ($1.53) for more than 30,000 yen. And that’s within the country.
MoneyTap also allows the clients of the participating banks to instantly transfer money between accounts for free. The system is connected to overseas financial infrastructure to allow for international transfers as well—meaning it can be used for remittances by overseas workers.
In addition, MoneyTap supports QR Code-enabled in-store payments. While payments to individuals are completely free of charge, in-store payments have to pay a fee that the company claims is the lowest in the industry.
MoneyTap leverages RippleNet, an international payments settlement network that aims to kill its more expensive and costly traditional counterpart, SWIFT.
Higo Bank is the leading bank of the Southern Japan City of Kumamoto and according to official documents it had over 3,300 billion yen (over $31.6 billion) in total assets.
With this latest addition, the number of financial institutions that participate in the MoneyTap network reached 38.
Disclosure: Modern Consensus founder Ken Kurson sits on the board of Ripple.