JAPAN Trends and Developments Contributed by: Takaharu Totsuka, Keisuke Hatano and Tomoki Kashimura, Anderson Mori & Tomotsune
History of regulations on payment collection service From 2008 to 2009, the Financial System Coun - cil Working Group (a sub-organisation within the Financial Services Agency (the “FSA”)) dis - cussed whether or not to regulate a typical “Pay - ment Collection Service” under the PSA as a “Fund Transfer Service”. As the members of the Financial System Council Working Group, the FSA’s advisory body in the legislative process, were unable to reach an agreement, the issue was deferred for future discussion. This did not mean that a “Payment Collection Service” was considered as falling outside the scope of a “Fund Transfer Service”. A public official expressed the view, during legislative discussions of the PSA in the Diet, that the “Pay - ment Collection Services” at that time were not necessarily illegal. In 2019, another Financial System Council Work - ing Group re-considered this issue and con - cluded that a “Payment Collection Service” that satisfies both of the following conditions is not necessarily subject to the regulations governing a “Fund Transfer Service” (the “Requirements in 2019”): • the service users are limited to business operators; and • it is clear from the contracts between the “Payment Collection Agent” and the service users that the payment obligation of the debt - or is discharged when payments are made to the “Payment Collection Agent.” In 2020 and 2021, the PSA and the Cabinet Office Ordinance on Funds Transfer Service Providers (the “Cabinet Office Ordinance”) were amended to introduce new Payment Collec - tion Service Regulations. Under Article 2-2 of
the PSA, certain “Payment Collection Services” that are considered to be equivalent to a “Fund Transfer Service” in nature are subject to the regulations regarding a “Fund Transfer Service”, as follows: “Acts of accepting funds as payment from, or having another person accept funds as pay - ment from, the obligor of the monetary claim or the person who makes payment by entrustment from the obligor (including two or more phases of entrustment) or by any other method similar thereto, by entrustment from the person who holds the monetary claim (the “Beneficiary”), taking over of a monetary claim from the Ben - eficiary, or any other similar method (excluding the act of transferring such funds by physically delivering them to the Beneficiary), and transfer - ring said funds to the Beneficiary, which satisfy the requirement that the Beneficiary is an indi - vidual (excluding the case where the individual acting as the Beneficiary is constituted as a business or for the purpose of a business), and any other requirements specified by the Cabinet Office Ordinance, shall be deemed to fall under the category of Fund Transfer Services.” According to this provision, “Payment Collec - tion Services” that can be classified as “Fund Transfer Services” are those “which satisfy […] requirements specified by the Cabinet Office Ordinance”. To this end, Article 1-2 of the Cabi - net Office Ordinance specifies: “The requirements specified by the Cabinet Office Ordinance as referred to in Article 2-2 of the PSA shall be that a Beneficiary is an individu - al (excluding the case where the individual acting as the Beneficiary is constituted as a business or for the purpose of a business) and that any one of the following conditions are applicable:
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