When a business partner uses a bank transfer to pay the amount stated on an invoice, a transfer fee is incurred. It is important to know who pays the transfer fee. Is it the customer or the business?

This article explains the answer to this question along with the basics of transfer fees that businesses should know when conducting transactions in Japan. We also discuss points to consider when requesting fee payment, including sample wording for invoices.

What’s in this article?

• What are transfer fees?
  
• Why does the customer typically pay transfer fees in Japan?
  
• Burden types for transfer fees in Japan
  
• Sample invoice phrasing to request transfer fee payments from customers
  
• Points to consider when requesting transfer fee payments from customers
  
• How Stripe Invoicing can help
  

What are transfer fees?

A transfer fee is a charge incurred when transferring money between accounts at a financial institution, such as a bank. The person who makes the transfer pays the transfer fees as compensation to the financial institution for the transfer services they provide. For Japanese businesses, it is not uncommon to adopt bank transfers as a major payment method in B2B transactions.

Transfer fees are not fixed or uniform, and the amount can vary depending on the following factors:

• Financial institution used by the business
  
• Financial institution used by the customer
  
• Amount transferred
  
• Transfer method (e.g., bank counter, bank automated teller machine [ATM], convenience store ATM, internet banking)
  
• Transfer payment type (e.g., cash or bank card)
  

Some financial institutions waive transfer fees for transfers within the same institution or between branches. In some cases, fees don’t apply for a set number of transfers each month.

Why does the customer typically pay transfer fees in Japan?

Financial institutions charge transfer fees for each transaction, with the exception of the cases mentioned above. The transfer fee must be paid by either the business or customer.

As a general rule, the party responsible for paying transfer fees is the party making the payment—that is, the customer. Under Japan’s Civil Code, Articles 484 and 485 establish the “principle of payment at the creditor’s place.” Simply put, unless otherwise agreed upon in advance by contract, it is stipulated that the party making the payment must also pay the transfer fees. Note: The information in this article is intended for general reference only. For specific details, we recommend consulting a legal professional.

However, if the customer and business agree upon terms in the contract, those negotiated terms can take precedence. Therefore, to prevent disputes arising from unclear responsibilities for transfer fees, businesses should establish agreements beforehand and clearly specify these details in writing within their contracts.

Burden types for transfer fees in Japan

Transfer fees fall into two categories based on who bears the cost: “our burden” (i.e., the customer’s expense) and “other party’s burden” (i.e., the business’s expense).

A key point to note is that “our” refers to the customer (i.e., the party transferring the funds), while “the other party” refers to the business (i.e., the party receiving the funds). These terms can easily lead to misunderstandings. It’s important to remember that “our” does not mean “our company” and “the other party” does not mean “our business partner.” It is important to be extremely careful when using these terms. We provide more details about each term below.

Our (customer’s) burden

Regarding transfer fees, “our” refers to the party transferring the payment. In other words, “our burden” means that the party paying the money (i.e., the customer who has received the invoice) will pay the transfer fee.

Specifically, the customer will pay the total amount stated on the invoice, including Japanese consumption tax (JCT) and transfer fees. The business who sent the invoice will receive the amount specified on the invoice.

Example

The invoiced amount is ¥150,000, and the transfer fee is ¥500.

• The customer making the transfer will send ¥150,500.
  
• The transfer fee of ¥500 will be deducted from the above amount by the financial institution.
  
• ¥150,000 will be transferred to the business receiving the funds.
  

Other party’s (business’s) burden

The “other party” is the recipient of the money. We explain below how it works when the business pays the transfer fee.

The “other party’s burden” refers to the business issuing the invoice including the transfer fee. In other words, the amount transferred to the business from the financial institution is the total amount stated on the invoice that includes tax, minus the transfer fee.

Example

The invoiced amount is ¥150,000, and the transfer fee is ¥500.

• The customer transfers ¥150,000, the amount stated on the invoice.
  
• The transfer fee of ¥500 will be deducted from the above amount by the financial institution.
  
• ¥149,500 will be transferred to the business receiving the funds.
  

Under Japanese civil law principles and general commercial practices, the customer typically pays the transfer fees. When implementing business-paid fees, it is extremely important for businesses to clearly state on their invoices that they will pay the transfer fees.

Sample invoice phrasing to request transfer fee payments from customers

Unless otherwise specified in the contract, the transfer fee is paid by the customer making the transfer. While it is common for the customer to pay transfer fees (i.e., “our burden”), it is still advisable to include a statement on the invoice explicitly specifying that the customer is responsible for any transfer fees. This statement is included as a precaution and is a matter of standard practice.

Below, we provide sample text for requesting that the customer pay the fees. Create a “Remarks” section on the invoice, and include this text:

Remarks

• Payee
  Bank A, Branch B (Savings) 0000000
  
• Account holder
  ABC Corporation
  
• Transfer fee
  Please note that transfer fees are the responsibility of the customer.
  
• Payment due
  January 31, 2025
  

While it is important to include a note requesting payment of transfer fees, the primary purpose of an invoice is to serve as a valid billing document. Therefore, make sure to thoroughly understand current legal frameworks in Japan, such as the Qualified Invoice System and the Electronic Books Preservation Act. Be sure to create documents that meet the requirements for qualified invoices in Japan.

Points to consider when requesting transfer fee payments from customers

As the number of transfers increases, the burden of transfer fees also increases. Businesses typically want to avoid paying transfer fees.

Below, we discuss points businesses should consider when asking customers to pay transfer fees. There are different considerations for new and existing customers.

For new customers

When conducting the first transaction with a new customer, it is advisable to establish a mutually agreed-upon rule regarding who will pay transfer fees before entering into a contract. This allows the business to build a good relationship with the customer without problems arising after the contract is signed. Make sure to include the statement, “Please note that any transfer fees will be the customer’s responsibility” on each invoice.

For existing customers

For transactions with existing customers, there can be cases where the business wishes to change the agreement so that the customer pays the transfer fees. This can happen even if the business has previously covered them.

In this case, avoid sending a generic message such as, “Please note that any transfer fees will be the customer’s responsibility.” Suddenly implementing changes without prior notice or consultation can risk damaging the customer’s trust.

Instead, when a company wants to change who pays the transfer fees, it is advisable for both parties to discuss the matter directly, rather than relying on written communication. If the customer refuses the changes, it is also important to show a willingness to concede. The business should show consideration for the customer and try not to lose a long-standing customer over a few hundred yen.

If the customer does agree to bear the transfer fee, it is advisable to add a note to the invoice stating, “Please note that any transfer fees will be the customer’s responsibility.” This can help ensure the customer’s peace of mind and clarity.

When issuing invoices, using an automated invoice generation system with high customization flexibility can significantly reduce time and effort. This can also allow businesses to handle invoicing tasks more efficiently. For comprehensive improvements to back-office efficiency, businesses can also consider implementing a comprehensive accounting system offered by a payment agent in Japan.

How Stripe Invoicing can help

Stripe Invoicing simplifies your accounts receivable (AR) process—from invoice creation to payment collection. Whether you’re managing one-time or recurring billing, Stripe helps businesses get paid faster and streamline operations:

• Automate accounts receivable: Easily create, customize, and send professional invoices—no coding required. Stripe automatically tracks invoice status, sends payment reminders, and processes refunds, helping you stay on top of your cash flow.
  
• Accelerate cash flow: Reduce days sales outstanding (DSO) and get paid faster with integrated global payments, automatic reminders, and AI-powered dunning tools that help you recover more revenue.
  
• Enhance the customer experience: Deliver a modern payment experience with support for 25+ languages, 135+ currencies, and 100+ payment methods. Invoices are easy to access and pay through a self-serve customer portal.
  
• Reduce back-office workload: Generate invoices in minutes and reduce time spent on collections through automatic reminders and a Stripe-hosted invoice payment page.
  
• Integrate with your existing systems: Stripe Invoicing integrates with popular accounting and enterprise resource planning (ERP) software, helping you keep systems in sync and reduce manual data entry.
  

Learn more about how Stripe can simplify your accounts receivable process, or get started today.