Real-Time Cross-Border Payment System for Daily Remittances Between China and Hong Kong

China and Hong Kong are launching a real-time cross-border payment system that connects the Interbank Payment System (IBPS) and FastPayment System (FPS). This initiative, developed jointly by the People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA), aims to facilitate low-value daily remittances for residents in both regions.

Project Overview

Known as Payment Connect, this project is being implemented by the China National Clearing Centre (CNCC) and Hong Kong Interbank Clearing Limited (HKICL). It enables participating financial institutions to process cross-border transactions in Renminbi and Hong Kong dollars within current account provisions. Transactions will be processed under the legal and regulatory frameworks of both jurisdictions.

Objectives and Use Cases

According to representatives from HKMA and PBoC, the system is designed to support various types of personal transfers, such as salary payments, tuition fees, and medical expenses. The authorities emphasize that this initiative will improve day-to-day financial interactions between China and Hong Kong without compromising compliance or risk management.

All transactions through Payment Connect will adhere to prevailing regulatory standards, including measures for anti-money laundering (AML), counter-terrorist financing, and cross-border financial flows control.

Operational Basis and Coordination Mechanism

The launch follows the establishment of a Memorandum of Understanding between the PBoC and HKMA, providing the necessary operational and legal framework for linking the two payment systems. Both central banks will maintain a joint coordination mechanism to oversee implementation and ensure service continuity.

CNCC and HKICL will work closely with financial institutions to maintain the system’s integrity and address any operational issues that arise, while upholding data security and transaction reliability.