Cross-border 'Payment Connect' service launched

The cross-border Payment Connect service was launched yesterday, creating a new channel for real-time payments between the Chinese mainland and Hong Kong. The service enables secure, efficient, and convenient transactions for both residents and institutions.

An aerial view of Shenzhen. File photo

Jointly launched by the People's Bank of China — the country's central bank — and the Hong Kong Monetary Authority, Payment Connect links the mainland's Internet Banking Payment System (IBPS) and Hong Kong's Faster Payment System (FPS). 

Payment Connect represents another significant initiative by the Central Government to support Hong Kong's development, enhance public welfare, and foster cooperation between the mainland and Hong Kong.

Through this system, users can now initiate cross-border remittances in both renminbi (RMB) and Hong Kong dollars via mobile and online banking channels, simply by entering the recipient's mobile number or account number.

Moreover, the direct connection of relevant payment infrastructure within the system will reduce the costs associated with cross-border money transfers.

A Shenzhen resident surnamed Fang became the first person on the Chinese mainland to use the new system yesterday, remitting 10,000 yuan (US$1,390) to her daughter studying in Hong Kong. Using the China Merchants Bank app on her mobile phone, she completed the transaction simply by entering her daughter's name and account number.

"Previously, I had to first convert the RMB into Hong Kong dollars, and it would take at least half a day for the funds to arrive. Now, with the cross-border Payment Connect, I can directly remit in RMB, and the funds are credited instantly. The process is extremely convenient," Fang said.

Hong Kong resident Mr. Ye became the first beneficiary of the new system in the SAR. On Friday, he received a notification from the Bank of China that the Payment Connect service was about to go live.

Following the bank's instructions, Mr. Ye entered the mainland mobile phone number associated with his mainland account into the mobile banking app. Yesterday morning, he conducted a northbound cross-border remittance, which was quickly credited to his account.

"In the past, whenever I traveled to Shenzhen, I always had to transfer money to my mainland account in advance so that it would be available when I arrived. Now, through the Bank of China [Hong Kong] mobile banking app, I can directly remit money from my Hong Kong account to my mainland account. It even supports receiving payments by simply entering a mainland mobile phone number. The process is simple, the funds are credited instantly, and there are no fees involved."

At launch, six institutions from the mainland and six from Hong Kong are participating in Payment Connect. They will roll out the service gradually, and more institutions will join over time.

What is IBPS?

IBPS, the faster payment system on the Chinese mainland, was built by the China National Clearing Center under the guidance of the People's Bank of China. IBPS enables users to make real-time, cross-bank retail payment transactions through the mobile banking or online banking of their bank. By using the system, one can handle cross-bank account management, fund transfers, fund consolidation, and other services without leaving home. Users can also obtain instant transaction processing results.

What is FPS?

The FPS, launched in September 2018 by the Hong Kong Monetary Authority, connects banks and stored-value facility operators (SVFs), enabling the public to make instant  cross-bank and cross-SVF fund transfers, at any time and from anywhere, by using the recipient's mobile number or email address.

The first batch of HK institutions participating in the Payment Connect service includes:

Bank of China (Hong Kong) Limited 

Bank of East Asia, Limited 

China Construction Bank (Asia) Corporation Limited 

Hang Seng Bank, Limited

HongKong and Shanghai Banking Corporation Limited 

Industrial and Commercial Bank of China (Asia) Limited

The first batch of participating institutions on the mainland:

Agricultural Bank of China Limited

Bank of China Limited

Bank of Communications Co. Ltd.

China Construction Bank Corporation

China Merchants Bank Co. Ltd

Industrial and Commercial Bank of China Limited