TOKYO -- Japan is set to allow nonbank companies to handle money remittances of over 1 million yen ($9,000), lifting a limit that has prevented fintech startups from providing faster and cheaper services in an area dominated by the banking sector.

The Financial Services Agency will grant licenses for large-sum money transfers to companies meeting capital requirements and other conditions. It aims to revise existing legislation to allow the services from mid-2021 at the earliest.

"By creating a new service category, we want to make convenient payment methods a reality," Finance Minister Taro Aso said at a news conference Tuesday.

Remittances, including foreign exchange, are one of banks' three core services along with deposits and lending. Japan allowed nonbank companies to enter money transfer services in 2010, but set a cap of 1 million yen in exchange for looser regulations in its registration system. Banks were able to retain their monopoly on remittances higher than that amount, mostly between businesses.

Consumers are accustomed to using electronic money and other settlement methods provided by nonbanks. Companies, however, must still use banks for business-to-business transactions, which often exceed 1 million yen.

The change represents a breakdown of one barrier protecting banks from new competition. With complaints that bank remittances take too long -- over a week for some international transfers -- the competitive environment is bound to change significantly.

There are currently 64 companies registered as money transfer services. One of them is Line Pay, which allows users of the Line messaging app to send money among themselves for free.

The 1 million yen cap is extremely low for corporations and makes nonbank providers difficult to use for international transfers, said Kristo Kaarmann, founder of TransferWise, a British financial technology company with a remittance network spanning 60 countries that now includes Japan.

TransferWise's smartphone app for sending money.

Removing the limit will help emerging companies enter the field. They are expected to enter business-to-business transfers with cheap fees and quick service.

"We will appropriately respond to various deregulations that are anticipated in the financial field," Line said Tuesday.

Should competition increase in business-to-business remittances, banks will likely have to lower their nearly 10,000 yen international transfer fees.