The People's Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) announced on Friday that Payment Connect will be launched on June 22, aiming to significantly improve the efficiency of cross-border payments between Hong Kong and the Chinese mainland.

Payment Connect will allow real-time fund transfers between mainland’s Internet Banking Payment System and Hong Kong's Faster Payment System (FPS). Residents from both regions will be able to make instant small-value remittances by entering the recipient's mobile number or account number.

For remittances from Hong Kong to the mainland under Payment Connect, the sender must hold a Hong Kong identity card. The transfer limit is up to HKD10,000 ($1,274) per person per day, with an annual limit of HK$200,000. No documentation is required for the remittance, provided that the recipient is an individual. The service will be available around the clock, and both bank account numbers and mobile numbers can be used for transactions.

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For remittances from the mainland to Hong Kong, the sender must hold a mainland identity card. The annual limit is $50,000. No documentation is required for the remittance. The service will only be available 16 hours a day, seven days a week. Transactions can be conducted using mobile numbers, email addresses, FPS, and bank account numbers.

Pan Gongsheng, head of the PBOC, stated that the Payment Connect marks a major milestone in deepening financial cooperation between the mainland and Hong Kong. It will facilitate trade and personnel exchanges, inject new vitality into Hong Kong's development, and further promote the cross-border use of RMB against the background of high-standard opening-up.  

Six banks from both the mainland and Hong Kong already operate Payment Connect. The participating banks in Hong Kong include Bank of China (Hong Kong) Limited, Bank of East Asia Limited, China Construction Bank (Asia) Corporation Limited, Hang Seng Bank Limited, HSBC Hong Kong, and Industrial and Commercial Bank of China (Asia) Limited. On the mainland, the participating banks are Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, China Merchants Bank, and Industrial and Commercial Bank of China.  

Darryl Chan, deputy chief executive of the HKMA, told the media on Friday that under Payment Connect, Hong Kong residents have a "no-reason quota" allowing them to convert up to HK$10,000 to RMB per day without needing to provide any justification. However, he explained that if there are special circumstances, Hong Kong senders can apply for an exemption through a bank review and approval process, meaning the limit may not necessarily apply to all cases.  

When asked whether Payment Connect could potentially be exploited by individuals with ulterior motives for illegal activities, Chan emphasized that banks have anti-money laundering measures in place to ensure the security of cross-border funds.  

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Stephen Pang, senior manager of Financial Infrastructure Development Division of the HKMA, told the media on Friday that currently, Payment Connect primarily facilitates individual transactions, or P2P transfers, although there are plans to gradually expand corporate payment services. Participating banks are actively engaging with business clients to prepare for this roll-out, he said.

Contact the writer at mikegu@chinadailyhk.com