TOKYO -- A number of Japanese banks plan to build a system that offers cheap, round-the-clock fund transfer services by taking advantage of innovations in financial technology.

The alliance is expected to initially draw about 15 members, including Bank of Yokohama and SBI Sumishin Net Bank. These will consist of both large and small conventional banks, as well as online banks. A study group on making the system commercially feasible will be formed in October.

Participants will share transaction histories and other data via the system, which will adopt blockchain technology. Bitcoins and other virtual currencies use blockchain for low-cost, highly secure record-keeping.

The partners will employ a payment settlement system developed by Ripple Labs. The California-based fintech company has formed a tie-up with SBI Holdings, which owns part of SBI Sumishin Net Bank. Ripple technology will be adapted for the Japanese financial industry. The service will be operational as early as next spring.

Banks will likely pay a tenth to a twentieth of the prevailing wiring costs under the new system. Cross-border fund transfers frequently cost thousands of yen, the rough equivalent of tens of dollars, in fees under the current setup.

Clients could transfer funds in small increments, such as 100 yen to 1,000 yen. The aim is to enable domestic and international transfers 24 hours a day, 365 days a year.

Internet users stand to benefit. Online retailers could receive payments at night, allowing immediate shipment of items. Investors engaging in foreign exchange margin trading would no longer miss out on opportunities, since they could wire funds to financial institutions during evening hours.

Megabanks are also improving their wiring services. Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. will separately start processing transfers between accounts at each bank 24 hours a day around February. Plans call for expanding the service to other banks later.

BTMU entered into a tie-up with U.S. bitcoin exchange operator Coinbase this July. The duo will work to find blockchain-based solutions to lower fees and speed up cross-border fund transfers.

Mizuho Financial Group is co-developing an international wiring protocol in a separate partnership with SBI.

Domestic fund transfers usually go through a system controlled by the Japanese Bankers Association. International remittances are handled via a network administered by the Society for Worldwide Interbank Financial Telecommunication. But development and maintenance costs have ballooned, with customer fees reflecting this.

Processing also takes time. Funds received in the middle of the night are usually not cleared until the next day.

The rise and looming encroachment of the online payment settlement market has driven megabanks and other Japanese banks to move away from large centralized nexuses and meet customers' needs through their own networks. Even the bankers' association is updating its system, looking to enable 24-hour interbank account transfers by the second half of 2018.

(Nikkei)