Why Recipients Often Get Less Money Than Sent From Japan

Money Transfer

Overview

Many foreign residents in Japan experience a confusing situation after sending money overseas.

You send a specific amount — for example ¥300,000 — but the person receiving the money abroad gets noticeably less. Sometimes the difference is small, and sometimes it is surprisingly large.

Many long-term residents in Japan only notice this after their first transfer, when the recipient reports a lower amount than expected.

In most cases, this is not a mistake and not a bank error.
Your money has not disappeared.
The transfer is behaving exactly as international banking systems are designed to work.

International bank transfers from Japan do not move directly from one bank account to another. Instead, they pass through multiple financial institutions, each of which may apply its own charges, exchange-rate adjustments, or processing rules.

As a result, the amount you send and the amount received are often different.

This article explains:

• Why recipients often receive less money than you sent
• What happens during an international transfer from Japan
• The different types of deductions that occur
• How residents in Japan can reduce unexpected losses

This is a normal result of how international bank transfers work, not a mistake by your bank or the recipient.

In other words, the money is not missing — it is reduced by predictable transfer costs.

Quick Answer: Why the Received Amount Is Lower

The recipient receives less money because international transfers from Japan pass through multiple banks.
During the process, three deductions typically occur: exchange-rate margin, intermediary bank fees, and receiving bank charges.

The sending bank’s listed transfer fee is often only a small part of the real total cost.

For a full explanation of how international transfers work structurally in Japan, see:
Wise International Transfers in Japan: A Complete Guide for Residents

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Why the Amount Received Is Different From the Amount Sent

International Transfers Do Not Move Directly

A common misunderstanding is that an international transfer works like a domestic bank transfer.

Inside Japan, when you send money to another bank account, the funds move through a centralized domestic clearing system. The sending bank and receiving bank are directly connected, and the full amount usually arrives unchanged.

International transfers work differently.

Banks in different countries are not always directly connected to each other. A Japanese bank usually does not hold accounts inside foreign banks, and a foreign bank usually does not hold accounts inside Japanese banks.

Because of this, the money cannot be sent straight from one account to another.

Instead, the transfer travels through a chain of financial institutions that cooperate to move funds between countries. Each institution in the chain processes the payment, verifies compliance requirements, and settles balances between banks.

This structure is called correspondent banking.

Rather than physically sending money overseas, banks adjust balances between partner institutions across multiple countries. The payment is effectively “passed along” step-by-step until it reaches the recipient’s bank.

As a result, an international transfer is not a single transaction.
It is a series of linked transactions handled by multiple banks.

This is the main reason the amount received can differ from the amount sent.

Each institution involved in the transfer may:

• apply handling fees
• convert currency
• perform compliance checks
• delay settlement timing

The next section explains how these institutions communicate and move the payment internationally.

Transfers Use the SWIFT Network

Most overseas transfers from Japanese banks use the international SWIFT correspondent banking network.

Unlike a domestic bank transfer inside Japan, the sending bank and the receiving bank usually do not have a direct relationship.

Instead, the transfer is routed through intermediary institutions that help move the money across countries.

One Transfer Is Handled by Multiple Banks

A typical international transfer from Japan looks like this:

Japanese sending bank
→ intermediary (correspondent) bank
→ another intermediary bank (sometimes)
→ recipient’s bank overseas

Each institution processes the transfer separately.
Because of this, additional deductions can occur along the way.

Intermediary Bank Fees

What an Intermediary Bank Does

An intermediary bank acts as a bridge between the sending and receiving bank.
It verifies the payment, routes the funds, and handles currency settlement between countries.

The sender usually does not know which intermediary bank will be used.
The Japanese bank also often cannot predict it in advance.

Typical Intermediary Charges

Intermediary banks commonly deduct:

• handling fees
• settlement charges
• routing costs

These deductions are removed before the money reaches the recipient.

Typical deductions range from $10 to $40 per intermediary bank, and multiple intermediaries may be involved in a single transfer.

This is one major reason the final received amount becomes smaller than expected.

Exchange Rate Losses

Mid-Market Rate vs Bank Rate

Another major difference comes from the exchange rate.

The exchange rate you see on Google or financial news sites is called the mid-market rate.
Banks do not use this rate for customer transfers.

Instead, they apply a customer exchange rate that includes a built-in currency conversion margin.

Example:

Google rate: 1 USD = 150 JPY
Bank transfer rate: 1 USD = 145 JPY

This difference is not a fee you see — it is a cost hidden inside the exchange rate.

Why the Exchange Rate Causes Bigger Losses

Even a 2–4% exchange-rate margin can exceed the visible transfer fee.

For example:

¥500,000 transfer
→ exchange-rate difference alone can reduce the received amount by over ¥15,000.

For a detailed explanation of this hidden cost, read:
Hidden Bank Fees for Overseas Transfers in Japan

Receiving Bank Charges

Incoming Transfer Fees Charged Abroad

The recipient’s bank may also deduct a fee when receiving the transfer.

Common receiving bank deductions include:

• incoming international wire fee
• foreign currency handling fee
• account processing charge

The sender in Japan usually cannot see these fees in advance.

Because these are applied after the money leaves Japan, the final amount appears smaller than expected.

Why the Final Amount Cannot Be Predicted

What Your Japanese Bank Cannot Control

Your Japanese bank controls only the first step of the transfer.

It cannot control:

• intermediary bank fees
• the recipient bank’s receiving charge
• the final exchange-rate timing
• compliance delays

This is why the bank often cannot guarantee the exact amount that will arrive.

Because of these uncertainties, many residents in Japan prefer transfer methods that confirm the exact received amount before sending.

This is why some residents believe money was lost during the transfer — but in reality, the costs were simply not shown in advance.

Services built specifically for international transfers — such as Wise — show the final amount the recipient will receive in advance, helping avoid unexpected deductions.

How Long International Transfers From Japan Usually Take

International bank transfers from Japan usually take 2–5 business days to arrive.
However, transfers may take longer if intermediary banks request verification, if compliance checks occur, or if currency conversion happens after banking hours in the destination country.

Because multiple institutions process the payment, delays do not necessarily indicate a problem. In many cases, the transfer is still moving through the correspondent banking network.

When This Happens Most Often

High-Risk Situations for Missing Money

Unexpected deductions are especially common in:

• small transfers
• tuition payments
• monthly remittances
• first-time international transfers

Repeated transfers make the total financial loss much larger over time.

A More Predictable Transfer Method

Why Some Services Show the Final Amount First

Some international transfer services use a different system.

Instead of sending money through multiple banks, they perform local transfers inside each country and handle the currency conversion separately.

Because fewer institutions are involved, intermediary deductions are avoided and the received amount can be shown in advance.

This makes international transfers more predictable.

When Bank Transfers Are Still Necessary

Situations Where SWIFT Is Required

Traditional bank transfers may still be needed for:

• corporate payments
• real estate transactions
• legal documentation requirements
• very large regulated transfers

However, for regular personal transfers, unpredictable deductions are common.

How to Reduce Missing Money

Practical Steps Residents Can Take

Residents in Japan can reduce unexpected losses by:

• comparing exchange rates, not only fees
• sending fewer, larger transfers instead of many small ones
• confirming which currency the recipient receives
• checking the estimated received amount before sending

Even small improvements in transfer structure can significantly reduce long-term losses.

This issue is closely related to how banks price currency conversion.
For a full explanation, read: Why Japanese Banks Don’t Show the Real Exchange Rate

A Typical Real-Life Example

Many residents first notice this problem when sending money to family.

For example, a resident in Japan sends ¥300,000 to a bank account overseas expecting the full converted value to arrive. After the transfer completes, the recipient reports receiving the equivalent of only about ¥270,000–¥285,000.

The sender checks the bank and sees only a small listed transfer fee, which creates confusion.
The difference is not a mistake — it is the combined effect of exchange-rate margin, intermediary bank deductions, and receiving bank charges.

This situation is extremely common for first-time international transfers from Japan.

Can Money Actually Be Lost in an International Transfer?

In normal bank transfers, money is almost never lost. What appears to be missing is usually deducted during processing, not stolen or misplaced.

Is the Bank Making a Mistake?

In almost all cases, the bank did not make a mistake and the money was not lost.
The difference happens because international transfers are processed by multiple institutions, each applying its own fees and exchange rates.

If the transfer details were correct, the missing amount is usually explained by intermediary fees, exchange-rate margin, or receiving bank charges — not an error or fraud.

Final Thoughts

When recipients receive less money than you sent from Japan, it is usually not a bank error.

It is the result of how international banking systems work.

The difference comes from a combination of:

• intermediary bank deductions
• exchange-rate margins
• receiving bank charges

Understanding these factors allows residents in Japan to predict transfer costs more accurately and choose a more suitable transfer method.

Once you understand the structure, international transfers become far less confusing — and far more controllable.

Once you understand where the deductions occur, you can predict the received amount before sending — and avoid most unexpected transfer losses.