The launch of Payment Connect links real-time payment systems in Hong Kong and Mainland China for the first time, offering regulated, small-value cross-boundary remittances; a step that may have wider implications for regional financial integration and the internationalisation of the Renminbi.
A new cross-boundary payments system linking Mainland China and Hong Kong has gone live, allowing residents in both jurisdictions to make real-time, small-value remittances using only a mobile number or bank account.
The system, announced on June 20, will be known as Payment Connect and integrates the Mainland’s Internet Banking Payment System (IBPS) with Hong Kong’s Faster Payment System (FPS).
Its launch follows a joint effort between the People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA), with oversight provided by the China National Clearing Center (CNCC) and the Hong Kong Interbank Clearing Limited (HKICL).
According to the HKMA, the service is designed to support cross-boundary personal remittances such as tuition fees, medical bills, and salaries. Payments can be made in either Hong Kong dollars or Renminbi under the current account, without documentary proof requirements. Business-to-person transfers are also permitted in limited cases, subject to regulatory policy.
“The connection between the faster payment systems in both places enhances the efficiency of cross-boundary payments,” said HKMA Chief Executive Eddie Yue. “This development will further promote Hong Kong’s position as an international financial centre and offshore Renminbi business hub.”
Daily limits and technical details
As of launch, six institutions from each side are participating, with the expectation that more will join over time. For Hong Kong residents, a daily transfer limit of HKD 10,000 applies per institution, with an annual cap of HKD 200,000.
These limits are separate from the RMB 80,000 cap applicable to same-name Mainland transfers. For Mainland residents, the quota is governed by an existing foreign exchange ceiling of USD 50,000 per year.
Users can initiate payments using a mobile number, bank account number, or FPS identifier. The FPS side supports email addresses as proxies, though these are not currently available under IBPS. Service hours differ: the FPS operates 24 hours a day, while IBPS currently supports cross-boundary transactions from 7am to 11pm.
Regulatory framework and risk management
Under the terms of the cross-boundary payment linkage, participating institutions are required to comply with the respective legal and regulatory frameworks of both jurisdictions, including rules on anti-money laundering (AML), counter-terrorist financing, and payment settlement.
The joint announcement states that the PBoC and HKMA will “establish an effective collaboration mechanism” to oversee Payment Connect operations. Risk control, transaction management and dispute resolution will be handled by the CNCC and HKICL.
The initiative is being introduced under the framework of a 2024 Memorandum of Understanding signed between the two authorities. It is one of several measures the central government has endorsed in relation to financial integration within the Greater Bay Area.
Policy intentions and scope
The stated objective of Payment Connect is to address “demand of residents in both places for secure, efficient and convenient cross-boundary remittance service”. Officials describe the system as a tool to facilitate economic activity, personnel exchange, and financial cooperation.
The system does not currently support corporate payments, higher-value transactions, or transfers outside of the specified use cases. While the press material indicates a phased approach to expansion, no timeline has been given for broadening scope beyond the current arrangement.
For payment providers, the link between IBPS and FPS introduces a new layer of infrastructure interoperability within the region, specifically between two regulated, real-time clearing systems. However, the functional limitations and initial use case restriction to small-value remittances mean that the commercial impact may be limited in the short term.
Unlike projects coordinated through international forums such as the Bank for International Settlements’ multi-CBDC pilots, Payment Connect is a bilateral mechanism operating under local laws and frameworks.
It does not currently interact with China’s digital yuan (e-CNY) or Hong Kong’s e-HKD initiatives, although observers have noted the potential for future convergence.
The HKMA has stated that the number of participating institutions will increase “over time” but has not committed to a schedule for wider roll-out. The system is currently limited to personal financial transactions tied to living and working arrangements across the border.
The Payment Connect initiative follows several recent cross-boundary infrastructure linkages involving Hong Kong, including those in wealth management and bond trading. Whether the system will be extended to include more complex or higher-value payments remains unclear.
