Registered Electronic Settlement Agency Service

The discussions and initiatives laid out here were undertaken by Japan's financial industry, these were compiled and fed into Act for Revision of the Banking Act, in May 2017.

 

Definition of Electronic Settlement Agency Service (ESAS) in the Banking Act

• At the direct or indirect request of a person who holds a deposit account at a bank (account holder), instructing or intermediating the request to transfer funds via an electronic data processing system; or
• At the direct or indirect request of an account holder (including those who hold an installment saving account), acquiring information related to the account from the bank and providing the information to the account holder (including providing the information via third parties or providing modified information) via an electronic data processing system.

Electronic Settlement Agency Service Provider (ESASP)

Services : PISP (Payment Initiation Service Provider) ; AISP (account Information Service Provider)

Registration : ESASPs are required to register to conduct ESAS in Japan

Regulator: Financial Services Agency (FSA) of Japan

 

 

Key Features of the New Regulation

Registration system for electronic settlement agents and services:

• Register with the office of the prime minister;
• Overseas corporations are to establish domestic representative or agent.

Regulation of electronic settlement agents and services:

• Explanations to users, measures to prevent mistakes, and ensuring the proper handling of information obtained;
• Appropriate measures to be in place for outsourcing;
• Concluding and announcing agreement with banks.

Supervision of electronic settlement agents an  services:

• Required to submit accounting books, etc.;
• Right of authorities to supervise operations (such as to issue orders to improve operations).

Measures for banks to promote open innovation:

• Publicize policy on collaboration and cooperation with electronic settlement agents and services;
• Create and publicize connection standards for electronic settle agents and services;
• Must prohibit improper handling by electronic settle agents and services;
• In deploying open APIs, banks are obliged to make efforts to put in place system such that electronic settlement agents and services can conduct electronic settlement and other operations without obtaining a means such as a code to identify users.

 

Source: FSA, Celent.