Tuesday, May 15, 2007

Banking in Japan

When I first arrived in Japan, I got hired by Nova conversation school and got my first taste of "how things work" in Japan from a financial point of view. First of all, your company chooses the bank you will be paid into based on the bank it does all its business with. The Japanese don't use checks except for rare business transactions so you're paid by direct transfer. If you're new and can't read or speak Japanese, a representative of the company will usually dutifully trot down to a bank with you and you can sit around being confused and writing exactly what you're told to write onto the various forms shoved in front of you.

You can open other bank accounts at different banks, of course, but you'll have to manage moving the funds from the bank your company uses to the bank you want to use and you'll have to pay a transfer fee of about $3.50 each time you make a transfer unless you want to carry around wads of cash. Since you don't get any interest to speak of on Japanese bank accounts (.2%-.5% in general on regular savings), there's really not much point in sending your money somewhere else.

Most mundane business is done using automatic teller machines (ATMs) rather than dealing face-to-face but one does need to do some activities with a real person. The process of arranging for payments to be made as automatic deductions from one's bank account, sending money overseas, and buying traveler's cheques are among those activities which require interaction with a real person. It was the latter which took my husband and I to our bank today.

Dealing face-to-face is a predictably drawn-out experience when it comes to anything requiring foreign currency exchange of any kind. There is never a line for such things so you can get waited on right away. The clerks are meticulous every step of the way and feel obliged to point out the exchange rate on a digital display at least twice to make sure you know what you're getting into. We actually were told four times by two different people.

Once you've communicated what you want, the clerk skitters off and gets the proper forms. You fill them out while she (or he) watches over your shoulder. If you make a mistake, you generally get to do it all over again. The form is then taken away and carefully scrutinized by crack teams of bank personnel for 10 minutes or more (this happens no matter how long or short the form is) and you're asked to move from the seat in front of the desk and sit in a waiting area.

Invariably, someone will rush over to you and say they require something else. It doesn't matter what you give them initially. You could give them every document you own and all your identification and they'd still need something else. If you give them your gaijin card, they'll want your passport. If you give them both of these, they'll probably want your employment contract. I don't think they really need the information, they just have to come over and ask for one more thing.

When the forms have endured all the scrutiny they can bear before bursting into molecules from the sheer force of the inspection they've received, you will be called back over to receive whatever it is you came for. In our case, it was $1000 worth of traveler's checks. The exchange rate we paid was 122.58 yen to the dollar. The math is pretty easy on that one so I said "122,580 yen" when the fellow (who spoke English) came over to explain the cost. He wouldn't take my word for it though and used a calculator twice to verify the total. He repeated the process for the 1% fee though anyone with a grade school education could have done it. Form must be followed at all costs.

After some confusion about where the envelope was to tidily put away all the paperwork and cheques, they gave us the pen and package of pocket tissues pictured above and thanked us with a smile. They are at times pointlessly meticulous but always polite.

Our current bank is Mizuho which was a new bank created from the consolidation of some other banks (including my former bank Daichi Kangyo). At some point in the not too distant past, a lot of banks joined up because of fiscal imprudence on the part of the banking industry on the whole. I guess that merger helped Mizuho scrape up the funds for a better mascot so we now get "Hello Kitty" gifts. In the past, Daichi Kangyo's motif was a pink flower design and no cartoon characters were associated with it. My first bank account ever in Japan had Peanuts characters as mascots. Snoopy was on my first banking card.

I'm never sure why banks feel obliged to have cartoon characters as a part of their advertising or card designs. I'm pretty sure that it does nothing to improve the number of people who bank there since so many people just use the bank their companies use. It certainly doesn't improve any sense of the bank being reliable or trustworthy to know "Hello Kitty" is on their side.


Helen said...

At least you were able to buy travellers cheques at the bank. I can't when I'm going home as most banks up here don't stock Canadian travellers cheques. I get the pleasure of going to the post office.

Before I came to Japan I was a bank teller, so I sold travellers cheques for a living. I still remember how to do it. I could give lessons on it for the PO staff, but of course I'm a "know-nothing furiner."

One time I went to the head office of the post office in my city for T/C. All they had in Canadian funds were 20s. Ack. I asked them to order larger denominations, which they did.

When they came in, it took 3 different clerks to find them, and to find that it was me that had ordered them! The man filled out my forms and I asked that the money be withdrawn from my PO account. So far, no problem. He gave my husband all of the papers (not sure why, _I_ was buying them.) I got the papers home and discovered that they'd given me too much paper. They'd forgotten to keep the bank record sheet. They wouldn't have balanced their records, and there wouldn't have been anything to prove that I bought the cheques.

I sent hubby back the next day with the extra papers to the Post Office and later that night someone called to thank us! I guess someone might have been in trouble if I hadn't noticed the extra papers.

Gotta love Japan banking....Not.

SOR said...

I believe if Japan ever remilitarizes, soldier recruiting ads will have one or more cute characters in them. Come to think of it, I think I saw a police officer recruiting poster that did.

Take it easy

tornados28 said...

I'm sure you have answered this before, but how come you decided to stay in Japan for 17 years? Since most english teachers, which I assume is what you did when you first went there, teach for 10 or 2 years it is interesting to hear of someone who stayed for so long.

Shari said...

Helen: I guess that most banks don't stock a lot of currencies when it comes to traveler's checks. The digitized board only mentioned U.S. exchange rates so that says a lot about their limits though I'm guessing Mizuho probably has them at their main branches (not ours very likely).

While you could only get small denominations, we could only get big ones ($100) but that was not a problem. This was actually my first experience with buying cheques myself as my husband did it last time.

I had to smile at your knowing more than the P.O. employees about dealing with traveler's cheques but them believing you didn't know what was up anyway. I'm not sure this is because you're a foreigner though. It could just be the way all customers are regarded.

Sor: Hi there and thanks for what I believe is your first comment (and a very funny one at that!). I'm checking out your blog now. :-)

tornados28: I have answered this before but perhaps in pieces in different places. The simplest answers are inertia, opportunity, and lifestyle. Now that you've asked this, I think it's high time I just did a full-blown post on it and attached it to the highlighted posts section. It's both complicated and simple. I'll write up a full answer in a post some time today and post it tomorrow.

Thanks to all for taking the time to comment! It's always appreciated.

nana said...

Hi Shari, I was searching for where best to cash travellers' cheques in Japan and came upon this entry. I'm in the Osaka area. I hear other people had a lot of trouble with it. Can you recommend what type of places or which bank could I do it at? what would be the fees and what would be the exchange rate in comparison to market rate? thank you very much

Shari said...

Nana, as far as I know, any bank will cash your traveler's checks. That being said, I'm certain all of them will charge a fee of some sort for doing so. I've heard that it's 1-2% as a fee and that whatever the current yen to your currency exchange rate is applies plus a few yen more.

Most services like this are uniform across banks so I wouldn't think you could get a special deal anywhere. Most of these things are either regulated or agreed upon informally.

You are right though that traveler's checks are a hassle. The Japanese are a cash-based society. I'm sorry that I can't be more helpful!