The Faster Payment System (FPS) launched by the Hong Kong Monetary Authority (HKMA) last month takes the Special Administrative Region one step closer to become a cashless society and to catching up to much of the world in payments.
Starting on September 30, Hong Kongers can transfer money to each other instantly anywhere and anytime at no costs.
Users can make fund transfers across different banks and e-wallets online and top-up their e-wallets via the FPS. It is done by connecting 21 banks and 10 e-wallet operators on the same platform.
A leader in one respect
The FPS is also the world’s first to support instant fund transfer in two currencies, namely the Hong Kong dollar and the Renminbi.
So far, the system has seen over 450,000 payee registrations and recorded over 50,000 transactions involving more than $200 million.
In the past, there was a fee to transfer money from one bank to another online and it could take days to process. Otherwise, the transfer could be done at no costs by visiting the recipient’s bank or by depositing the money at the ATM in person.
“[The launch of the FPS] signifies that Hong Kong’s payment system, a core part of Hong Kong’s financial infrastructure, is moving into a new era,” said Mr Norman Chan, CEO of the HKMA, last month.
Financial chief Mr Paul Chan Mo-po also said at the FPS launch last Friday that the government is considering letting the public pay utility bills through the FPS.
With instant payment services now available round-the-clock, users will only need to provide a registered mobile phone number or email address to accept payments as a payee.
Transactions can also be settled in real time across different banks and e-wallets. Some banks have set the cap at $10,000 per day.
This is poised to further facilitate peer-to-peer and peer-to-merchant transactions. Currently, e-payment accounts for about 60 percent of total private consumption expenditure in Hong Kong.
Mr Chan said the FPS can be a game changer in Hong Kong’s retail payment landscape and “maintain Hong Kong’s financial infrastructure at world class level”.
There’s more! QR codes
Besides the FPS, the HKMA also introduced the common QR code standard and launched an associated mobile app, which can combine multiple QR codes from different payment service providers into a single QR code.
“This will greatly facilitate smaller merchants by obviating the need of displaying multiple QR codes to their customers,” said Mr Chan.
“The public will experience a gradual shift in their shopping and payment habits. The FPS, coupled with the rapid advancement in fintech (e.g. virtual banking), will propel the banking industry in Hong Kong to move into a new era of Smart Banking,” he added.
The system is one of the HKMA’s seven measures announced last year under the Smart Banking initiative.
Another is virtual banking, which means financial institutions can operate without physical branches and all transactions can be done online – a step toward financial inclusion.
The HKMA said more than 50 companies have shown interest in the licenses. They received 29 applications for the first round of applications that closed August 31. The first of such license could be issued as early as this year.
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