China and Hong Kong to launch Payment Connect

The initiative, jointly developed by the People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA), aims to streamline low-value, real-time fund transfers between residents in both jurisdictions. 

The project, known as Payment Connect, is being implemented by the China National Clearing Centre (CNCC) and Hong Kong Interbank Clearing Limited (HKICL). It enables participating institutions in both regions to facilitate cross-boundary remittances in Renminbi and Hong Kong dollars. These transactions will be processed under current account provisions, within the legal and regulatory frameworks of both jurisdictions.

System objectives and use cases 

According to HKMA and PBoC representatives, the system is expected to support various types of personal transfers, including salary payments, tuition fees, and medical expenses, improving day-to-day financial interactions between the two markets. The authorities stated that the initiative is designed to increase the efficiency and quality of cross-boundary payments without compromising compliance or risk management. 

Officials involved emphasised that all transactions through Payment Connect will be subject to prevailing regulatory standards, including measures for anti-money laundering, counter-terrorist financing, and controls on cross-border financial flows. 

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

The CNCC and HKICL will work with financial institutions to maintain the system’s integrity and address any operational issues that arise, while upholding data security and transaction reliability. Mainland’s central banking authority noted that the programme supports wider economic integration objectives and aligns with policy initiatives aimed at facilitating financial cooperation between Hong Kong and the Mainland.