JAPAN Trends and Developments Contributed by: Keiji Tonomura, Shu Sasaki, Kazuyuki Ohno and Otoki Shimizu, Nagashima Ohno & Tsunematsu
also highly significant for the Japanese economy and is expected to serve as a driving force accelerating the evolution of financial markets. Regulatory Trends in Cross-Border Collection Agency Under the Banking Act of Japan and the PSA, any person engaging in “exchange transactions” as a business in Japan is generally required to obtain a licence such as a banking business licence or register as a fund transfer business. Although the Supreme Court has handed down a decision regarding the defi - nition of “exchange transactions”, its scope remains unclear, which makes it difficult to definitively deter - mine whether a particular service constitutes a regu - lated fund transfer service. In relation to collection agencies receiving pay - ments from payers on behalf of creditors, the PSA explicitly defines certain transactions meeting spe - cific requirements as “exchange transactions”. The amended PSA, which was enacted on 6 June 2025, provides that certain cross-border collection agency transactions fall under “exchange transactions”. On 16 December 2025, the draft of amendments to the Cabinet Office Order on Funds Transfer Service Pro - viders were published. These amendments specify transactions excluded from being classified as cross- border collection agency transactions that fall under “exchange transactions” under the PSA. Additionally, the draft of amendments to the Administrative Guide- lines for Funds Transfer Service Providers have also been published. It is important to note that transactions not explicitly specified as “exchange transactions” under the PSA may still be regulated if they meet the criteria defined by the Supreme Court decision, making careful con - sideration necessary. Regulated cross-border collection agency transactions provided in the draft of the amendments According to the amendments, cross-border col - lection agency transactions involving the transfer of funds from domestic to foreign entities or vice versa (excluding physical cash delivery) are regulated as
“exchange transactions”, unless they fall into one of the following exceptions. • Receiving payments from a debtor and transferring the funds to a recipient through a licensed bank or fund transfer service provider. • Collection agency services accompanying escrow services. • Collection agency services conducted by transac - tion platforms. • Collection agency services where the recipient is a debtor’s group company. • Certain collection agency services conducted by international credit card brands. • Collection agency services where a recipient is a merchant of credit cards or registered third-party prepaid payment instruments. • Collection agency services conducted on behalf of escrow service providers or transaction platforms. • Collection agency services conducted on behalf of licensed banks or fund transfer service providers. Even if a cross-border collection agency transactions fall under any category of the exceptions above, if it falls under “a transaction with significant threats to user protection”, it is regulated as an “exchange transaction”. The draft of amendments to the Cabi - net Office Order on Funds Transfer Service Providers defines “a transaction with significant threats to user protection”, to include cross-border collection agency transactions conducted by gambling operators. The requirements to qualify for these exceptions are detailed in the draft amendments to the Cabinet Office Ordinance on Funds Transfer Service Providers and explained in the draft amendment to the Administra - tive Guidelines for Funds Transfer Service Providers. As such, fund transfer service providers intending to conduct cross-border payment agency services must carefully evaluate whether they meet the exception requirements, utilising the Administrative Guidelines and public comments to be published. Since the draft amendments published on 16 Decem - ber 2025 are preliminary, one needs to stay updated on the final amendments to both the Cabinet Office Ordinance and the Administrative Guidelines.
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