FSA to conduct targeted inspections of cashless payment service providers

Media reports have revealed that Japan’s Financial Services Agency will start conducting targeted inspections, including onsite inspections, of cashless payment service providers, such as funds transfer service providers and issuers of prepaid payment instruments as defined in the Payment Services Act. It is said that the FSA will focus inspections on developing the necessary structures, including system safety and anti-money laundering measures, in response to a series of cases of the unauthorized access to 7pay, a smartphone-based payment service provided by Seven & i Holdings Co., Ltd., which occurred immediately after the service was launched. Seven & i Holdings, the largest distribution and retailing business in Japan, operates convenience stores and department stores.

On August 6, the Financial Action Task Force (FATF) revealed its plan to inspect Japan’s international financial institutions over three weeks from October 28 to November 15, 2019. The “Handouts for Council on Customs, Tariff, Foreign Exchange and Other Transactions/Sub-council on Foreign Exchange and Other Transactions” issued by the International Bureau of the Ministry of Finance on June 14 mention that cryptocurrency exchanges will be subject to evaluations by Japan’s FATF. There is a possibility that oversight of cryptocurrency-related companies in Japan will be strengthened in the future.

*This article was written by FISCO.