Payment Services Act

The Prime Minister must refuse registration when an applicant falls under any of the following items, or a written application for registration or its accompanying documents contain false statements about important particulars, or lack any statement about important particulars:

a person other than a stock company or a foreign funds transfer service provider (limited to a foreign company that has a business office in Japan);

a foreign funds transfer service provider that is a corporation who does not have a representative person in Japan (limited to a person who is domiciled in Japan);

a corporation which lacks the sufficient financial foundation that is necessary for the provision of funds transfer services in a proper and steady manner;

a corporation which has not established a system for the provision of funds transfer services in a proper and steady manner;

a corporation which has not established a system that is necessary for ensuring compliance with the provisions of this Chapter;

a corporation which intends to use a trade name that is identical to the one currently being used by another funds transfer service provider or that may be misidentified as another funds transfer service provider;

a corporation which had its registration referred to in Article 37 revoked pursuant to the provisions of Article 56, paragraph (1) or (2), had its registration referred to in Article 62-3 revoked pursuant to the provisions of Article 62-22, paragraph (1) or (2), had the permission referred to in Article 63-23 revoked pursuant to the provisions of Article 63-37, paragraph (1) or (2), or had its license under the provisions of Article 64, paragraph (1) revoked pursuant to the provisions of Article 82, paragraph (1) or (2), or had the registration, permission or license of the same type in a foreign state (including other administrative dispositions similar to the registration, permission or license) revoked pursuant to the provisions of laws and regulations of the foreign state equivalent to this Act or the Banking Act, etc., and for which five years have not passed from the date of the revocation;

a corporation which received an order to discontinue specified funds transfer services pursuant to the provisions of Article 56, paragraph (1) as applied pursuant to Article 37-2, paragraph (2) following the deemed replacement of terms, received an order to discontinue electronic payment instruments services pursuant to the provisions of Article 62-22, paragraph (1) as applied pursuant to Article 62-8, paragraph (2) following the deemed replacement of terms, or received an order to discontinue the same type of services as these services pursuant to the provisions of laws and regulations of a foreign state that are equivalent to this Act or the Banking Act, etc., and for which five years have not elapsed from the date of the order;

a corporation which has been punished by a fine (including a punishment pursuant to laws and regulations of a foreign state equivalent to this) for violating the provisions of this Act, the Banking Act, the Act on Engagement in Trust Business by Financial Institutions, the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates (Act No. 195 of 1954), or the Trust Business Act, or laws and regulations of a foreign state equivalent thereto, and for which five years have not elapsed from the day on which the execution of the sentence ended or from the day on which the sentence ceased to be executed;

a corporation whose other business is found to be against the public interest;

a corporation that employs a person who is a company director, company auditor, executive officer, or accounting advisor (meaning a person equivalent thereto under laws and regulations of a foreign state or representative persons in Japan in cases of a foreign funds transfer service provider; hereinafter referred to as a "company director, etc." in this Chapter) falling under any of the following items:

a person specified by Cabinet Office Order as being unable to properly perform their duties pertaining to funds transfer services due to a mental or physical disorder;

a person who has not had their rights restored after receiving an order to commence bankruptcy proceedings, or a person equivalent thereto pursuant to laws and regulations of a foreign state;

a person who has been sentenced to imprisonment or heavier punishment (including equivalent punishment pursuant to laws and regulations of a foreign state), and for whom five years have not elapsed from the day on which the execution of the sentence ended or from the day on which the sentence ceased to be executed;

a person who has been punished by a fine (including a punishment pursuant to laws and regulations of a foreign state equivalent to this) for violating the provisions of this Act, the Banking Act, etc., the Act on Engagement in Trust Business by Financial Institutions, the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates, the Act on Prevention of Unjust Acts by Organized Crime Group Members (Act No. 77 of 1991), or the Trust Business Act, or laws and regulations of a foreign state equivalent thereto, and for whom five years have not elapsed from the day on which the execution of the sentence ended or from the day on which the sentence ceased to be executed; or

if a funds transfer service provider had its registration referred to in Article 37 revoked pursuant to the provisions of Article 56, paragraph (1) or (2), or a corporation had the registration of the same type in a foreign state (including other administrative dispositions similar to the registration) revoked pursuant to the provisions of laws and regulations of the foreign state equivalent to this Act, a person who was a company director, etc. of the corporation at any time during the thirty days prior to the date of the revocation and for whom five years have not passed from the relevant date or a person similar thereto specified by Cabinet Order.

When the Prime Minister refuses the registration pursuant to the provisions of the preceding paragraph, the Minister must notify the applicant to that effect by indicating the reason without delay.

When a funds transfer service provider intends to provide type I funds transfer services, the funds transfer service provider must formulate a business implementation plan containing the following particulars and obtain authorization of the Prime Minister, pursuant to the provisions of Cabinet Office Order. The same applies when a funds transfer service provider intends to change the business implementation plan (excluding minor changes specified by Cabinet Office Order):

if the funds transfer service provider sets the maximum amount of funds to transfer in funds transfer transactions, that upper limit;

the method of the management of an electronic data processing system to be used for funds transfer transactions; and

other particulars specified by Cabinet Office Order.

When a funds transfer service provider has made any minor change specified by Cabinet Office Order as prescribed in the preceding paragraph, the funds transfer service provider must notify the Prime Minister to that effect.

The Prime Minister may set requirements for the approval referred to in paragraph (1) and change those requirements, to the extent necessary for the approval.

When a funds transfer service provider intends to change any of the particulars set forth in Article 38, paragraph (1), item (vii) (limited to changes due to its intention to provide a new type of funds transfer service), the funds transfer service provider must have the change registered by the Prime Minister, pursuant to the provisions of Cabinet Office Order.

The provisions of Articles 38 through 40 apply mutatis mutandis to the registration of change referred to in the preceding paragraph. In this case, the term the "following particulars" in Article 38, paragraph (1) is replaced with the "particulars pertaining to the change", the term "any of the items of Article 40, paragraph (1)" in paragraph (2) of that Article is replaced with "any of the items of Article 40, paragraph (1) (excluding items (i), (ii) and (vi) through (xi))", the term the "following particulars" in Article 39, paragraph (1) is replaced with the "particulars pertaining to the change", and the term "any of the following items" in Article 40, paragraph (1) is replaced with "any of the items of Article 40, paragraph (1) (excluding items (i), (ii) and (vi) through (xi))".

When a funds transfer service provider intends to make any changes that are specified by Cabinet Office Order as those that are likely to weaken the protection of users of funds transfer services or hinder the proper and steady provision of funds transfer services (referred to "changes to the details of specified business, etc." in the following paragraph) which are the particulars set forth in Article 38, paragraph (1), item (viii), the funds transfer service provider must notify the Prime Minister to that effect in advance.

When any of the particulars set forth in the items of Article 38, paragraph (1) (excluding changes to the details of the specified business, etc., and in the case of a change in the particulars set forth in item (vii) of that paragraph, limited to the change due to the discontinuation of the whole funds transfer service of the same category) are changed, the funds transfer service provider must notify the Prime Minister to that effect without delay.

When the Prime Minister accepts a notification under the provisions of the preceding two paragraphs, the Minister must register the informed particulars in the register of funds transfer service providers.

A funds transfer service provider must not have another person provide the funds transfer services in the name of the funds transfer service provider.

A funds transfer service provider must make security deposits for providing funds transfer services to the official depository nearest to its head office (in cases of a funds transfer service provider that is a foreign funds transfer service provider, its principal business office in Japan; the same applies in Article 48) for each category of funds transfer services set forth in the following items as specified therein in accordance with the category of funds transfer service:

type I funds transfer services:make security deposits in an amount equivalent to an amount not less than the amount required for security deposit for providing funds transfer services as of each business day during a period set by the funds transfer service provider within the period specified by Cabinet Office Order not exceeding one week from the relevant business day; or

type II funds transfer services or type III funds transfer services:make security deposits in an amount equivalent to an amount not less than the maximum amount of the amount required for security deposit for providing funds transfer services pertaining to type II funds transfer services or type III funds transfer services during a period not exceeding one week set by the funds transfer service provider for each category of funds transfer services, for the respective periods, during a period set by the funds transfer service provider within the period specified by Cabinet Office Order not exceeding one week from the last day of the former period (referred to as the "Base Date" in Article 45-2, paragraphs (4) and (5) and Article 47, item (i)).

The term "amount required for security deposit for providing funds transfer services" as used in the items of the preceding paragraph means the total amount of outstanding obligations in the process of being transferred (meaning an amount, calculated pursuant to the provisions of Cabinet Office Order, of obligations borne by a funds transfer service provider in relation to funds transfer transactions carried out by the funds transfer service provider; hereinafter the same applies in this Chapter) as of each business day for each category of funds transfer service and an amount calculated pursuant to the provisions of Cabinet Office Order as the amount of costs pertaining to the procedure for the fulfillment of the right specified in Article 59, paragraph (1) (for type III funds transfer services by a funds transfer service provider to whom the provisions of Article 45-2, paragraph (1) are applied, the total amount obtained by deducting the amount of outstanding obligations in the process of being transferred pertaining to type III funds transfer services as of each business day multiplied by the rate of management by bank deposits or savings specified in that paragraph from the amount of outstanding obligations in the process of being transferred as of each of those business days, and the amount calculated pursuant to the provisions of Cabinet Office Order as the amount of costs pertaining to the procedure for the fulfillment of the right specified in Article 59, paragraph (1)); provided, however, that if the total is not more than the amount specified by Cabinet Order as being necessary for ensuring the performance of obligations borne by a small-scale funds transfer service provider in relation to funds transfer transactions carried out by the small-scale funds transfer service provider, the amount required for security deposit for providing funds transfer services is the amount specified by the relevant Cabinet Order.

National government bond certificates, local government bond certificates or other bond certificates specified by Cabinet Office Order (including transfer bonds prescribed in Article 278, paragraph (1) of the Act on Book-Entry Transfer of Corporate Bonds and Shares; the same applies in Article 45, paragraph (3)) may be deposited to fulfill the security deposits for providing funds transfer services requirement. In this case, the appraised value of those bond certificates is determined pursuant to the provisions of Cabinet Office Order.