Hong Kong and Mainland China to Launch Payment Connect for Enhanced Cross-Boundary Transactions

The People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) have jointly announced a significant development aimed at enhancing financial cooperation between Mainland China and Hong Kong. This initiative, known as Payment Connect, is set to launch on June 22, 2025, according to the Hong Kong Monetary Authority.

Enhancing Cross-Boundary Financial Services

Payment Connect facilitates the integration of the Mainland’s Internet Banking Payment System (IBPS) and Hong Kong’s Faster Payment System (FPS). This integration supports real-time cross-boundary payment services for residents, ensuring compliance with the legal and regulatory frameworks of both regions. The initiative aims to provide secure, efficient, and convenient remittance services, addressing the growing demand for cross-boundary financial transactions.

Key Features and Benefits

The Payment Connect initiative allows participating institutions of both payment systems to offer remittance services in Renminbi and Hong Kong dollars. It also supports instant remittance services for common transactions such as salary disbursements, tuition fees, and medical bill payments. This measure is expected to significantly enhance the quality and efficiency of cross-boundary payments, facilitate economic activities, and contribute to the financial integration of the two regions.

Strategic Implications

Payment Connect represents a strategic move by the Central Government to bolster Hong Kong’s status as an international financial hub and a global offshore Renminbi business center. By improving the ease of financial transactions, the initiative is poised to elevate Hong Kong’s competitive edge and reinforce its position in the global financial landscape.

Regulatory and Operational Framework

Under the Memorandum of Understanding on Cross-Boundary Linkage of Payment Systems, the PBoC and HKMA will collaborate to ensure the orderly operation of Payment Connect. This includes compliance with anti-money laundering and counter-terrorist financing regulations. The China National Clearing Center (CNCC) and Hong Kong Interbank Clearing Limited (HKICL) will coordinate with participating institutions to maintain secure and efficient payment services.

The launch of Payment Connect marks a pivotal step in the ongoing efforts to deepen financial ties between Mainland China and Hong Kong, promising to enhance the daily financial lives of residents in both regions.

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