Why Postal Banking Rules

I’m pleased to present to you the first ever guest post on toppa.com, by Maria. A major area of Maria’s research is Japan’s Postal Savings system. In Japan, you can use the post office just like a bank, and most Japanese do. The money in the Postal Savings system is, in effect, a huge pot of money used by the government almost like a second budget. Over the past several years there’s been a great deal of political debate about to what extent this system should be privatized or dismantled in favor of private banks. One of Maria’s papers on this topic is non-technical and is quite interesting - you can download the PDF here.

How the Post Office here compares to private banks confounds what you’d expect from an American perspective. You can not only take care of mail and banking at the post office, but you can also pay your bills there - from utility bills to paying for an Amazon order. If you have a package that requires a signature for delivery, you can call anytime before 9pm and they’ll bring the package to your door within two hours. Post Office ATMs are also the only place you can withdraw money from a foreign bank account.

With that lengthy introduction aside, Maria’s post describes her experience trying to get money from the account where her paychecks are deposited, which, unfortunately for us, is at a private bank.

This is purely anecdotal. Today’s experience making a simple withdrawal from a private Japanese bank reinforces the commonly-cited reasons for why Postal Savings (PS) and postal banking remain a major threat to Japan’s private banks, and even more so as JPost slowly wends its way through privatization.

We got our Japanese bank account through Hitachi’s connections with the Tokyo-Mitsubishi UFJ bank (Hitachi is the sponsor of my fellowship). Today, I went to withdraw about $1000 to get through the next few weeks. I had to go in person because the ATM card has still not arrived after 2 weeks (score +1 for PS). Fortunately, I work near the main branch, so I walked over to take care of the transaction in person. If I had a postal savings account, I could have instead wandered into just about any post office (+2 PS). I walked into the enormous Italian granite-sheathed transactions hall, and was immediately welcomed by 3 smartly-uniformed employees whose sole purpose as far as I could tell was to bow, say “welcome” and push the button that would dispense the ticket with my number that would be called: I could have done that myself (+4 PS, 1 for the overhead of the furnishings and fixtures; 1 for employee redundancy). I didn’t need the ticket after all because my number was called as soon as I got the ticket.

I explained to the teller that the account was established for a foreign address and that my ID was a driver’s license. I had already filled out in advance a transactions slip to make the withdrawal. I had to make out a new one because they require foreigners to write their slips out in English, not Katakana like I did. Then I signed it. Then waited. I was called up to make out yet another slip because my signature did not exactly match the one on file. They showed me my filed signature and I was asked to reproduce it, which I did to the best of my ability (+5 PS). I was asked to wait again while the teller consulted with at least 4 others (+6 PS). Then I was called up again to show my ID. I gave her my license, my JBIC ID card and my Villanova ID, which she made copies of.

After she made a few more phone calls, the teller finally handed me the money in a crisp envelope, another employee came up to the counter and they both apologized profusely for the time it took (about 15 minutes). They gave me a complimentary Winnie the Pooh notepad for my troubles. One more thing: UFJ’s ATMs, like other private Japanese banks’, don’t take foreign ATM cards. But the post office ATMs do (this one gets bonus points, +10 PS).

So the upshot is, while UFJ’s tellers were exceedingly polite, the surroundings lush, and the personal service attentive, if not obsequious, I would always opt for the convenience and speed of a utilitarian post office, where one gets equally polite service, and can easily get through transactions that private institutions here find difficult.