PBoC and HKMA to link up instant payment systems

The People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) are planning to launch a pilot next year to link up the fast payment systems of mainland China and Hong Kong, according to HKMA chief executive Eddie Yue.

The trial will involve connecting the mainland’s Internet Banking Payment System (IBPS) and Hong Kong’s Faster Payment System (FPS), Yue told reporters on the sidelines of the Hong Kong Fintech Week on October 28.

The initiative will allow Hong Kong residents to make small-value cross-bank payments to a mainland account instantly and 24/7, using only the recipients’ mobile numbers. Chinese residents will be able to do the same with payments to Hong Kong.

Yue said officials at the HKMA and the PBoC are now working on the details of the scheme, including issues such as how to calculate the exchange rates, the transaction limits and the pilot regions. The scheme is expected to kick off in the middle of next year.

Launched by the HKMA in 2018, the FPS allows users with a bank account to make instant payments in Hong Kong dollar or the yuan to local individuals and merchants 24/7. FPS supports payments made using the payee’s mobile number and email address. It also supports the topping-up of e-CNY wallets by Hong Kong residents.

In December 2023, the HKMA and the Bank of Thailand set up a cross-border QR payment link between Hong Kong and Thailand by connecting FPS and PromptPay – Thailand’s instant payment system.

The link has allowed Hong Kong travellers in Thailand to instantly pay Thai merchants by using their mobile payment apps to scan PromptPay QR codes. Thai travellers can also make retail payments in Hong Kong by scanning FPS QR codes.

The PBoC launched IBPS in 2010. It allows consumers, businesses and government agencies to make real-time yuan payments 24/7, using only the recipient’s mobile number. The maximum transaction value via IBPS is 1 million yuan ($140,000) per transaction.

In 2023, the system processed 17 billion payment transactions, up 2.6% year on year, according to PBoC data. The total value of transactions was 301 trillion yuan in 2023, 8% more than the year before.