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As you probably know from your own experience making an international transfer at Japanese banks can be extremely painful and will typically involve you visiting the bank within your lunch hour, filling out an overly detailed form, paying 4,000 yen or more in transfer fees and worst of all, being given an unfavorable exchange rate to boot.
But thanks to fintech companies such as Wise and Revolut there are now cheaper and faster solutions which allow you to fund your overseas investment accounts with just a few clicks and no hidden fees.
Wise (formerly known as TransferWise) is a UK fintech company with a global outreach which has been providing its foreign exchange service in Japan since 2016. You might have already used their services. Revolut is another UK fintech company which launched its service in Japan in August 2020 and competes in the same space.
Wise and Revolut are using an innovative way to transfer money from one country to another. They do not move money cross-border. For example, if you wish to send JPY to your investment account in the Isle of Man, you transfer the funds locally to their account in Japan. Then they send an equivalent amount in your preferred currency from their Isle of Man bank account to your investment account provider. So, there are two domestic transfers but no international transfer.
Of course they charge a fee, but they can be significantly cheaper than those charged by traditional banks. In particular, when sending JPY to bank accounts denominated in a different currency, they use the mid-market exchange rate.
Please find below a few comparisons as at June 7th, 2021.
Amount received in USD for JPY 100,000
Revolut: USD 913.35
Wise: USD 906.40
Rakuten: USD 889.30
Shinsei: USD 885.76*
SMBC (Prestia): USD 873.61*
Amount received in USD for JPY 1,000,000
Revolut: USD 9.122.20
Wise: USD 9,073.75
Rakuten: USD 9,035.60
Shinsei: USD 9,020.56*
SMBC (Prestia): USD 9,020.27*
*Amount does not take into account additional bank transfer fees of 4,000 yen +/-.
Please note: Payments to/from Wise and Revolut accounts registered in Japan are capped at 1 million yen (or at an equivalent value in other currencies) per transaction due to local regulations. However, if you wish to send more you can simply split your transfers over a period of days. It is also possible to schedule payments.
So how does this work in practice when you want to fund your investment account either with a one-off lump sum or regular contributions? The flowchart below should explain…
With Wise and Revolut you can open an account and get it approved within 1-3 business days and once your account has been approved you can fund it via local bank transfers. No more frustrated lunch hours spent in a bank!
If you already have an investment account through AP Advisers you can more easily fund it by opening a Wise or Revolut account and set up one-off or regular payments. Simply send an email to firstname.lastname@example.org and we would be happy to discuss the best solution for you.
If you have yet to open an investment account, please contact us here for a free, no-obligation consultation.