China’s financial authorities have granted Hong Kong residents a new daily remittance quota for the renminbi, as a cross-border electronic transactions service prepares to kick off, linking 315 million users between the city and the mainland.
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Starting from noon on Sunday, the 17 million registered users of Hong Kong’s Faster Payment System (FPS) will be able to remit up to HK$10,000 (US$1,282) per day for each bank account to 298 million users on the mainland’s Internet Banking Payment System (IBPS) via a new transborder scheme called the Payment Connect.
The scheme, supported by six banks each on the mainland and in Hong Kong, will let users transfer money across borders to pay for travel, meals, education, medical services, salaries and other daily activities, according to the Hong Kong Monetary Authority (HKMA).
“We will continue to explore other use cases,” said Nelson Chow, the HKMA’s executive director for financial infrastructure, during a briefing on Friday. “The infrastructure of cross-border payment is now up, like a highway for payments. We just need to continue to explore more use cases in future.”
The new scheme, in development since August last year by the HKMA and the People’s Bank of China, will revolutionise cross-border remittances for individuals and businesses, while boosting Hong Kong’s status as an international financial centre and the trading hub of the offshore yuan, said the HKMA’s chief executive Eddie Yue Wai-man.
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Mainland residents are still limited to US$50,000 in annual overseas remittances, while Hong Kong residents are subject to an 80,000 yuan (US$11,129) ceiling in daily transfers to accounts of the same name on the mainland. Using Payments Connect, transfers for medical bills, tuition fees or daily needs can be unlimited. Employers can also remit salaries across borders, subject to pre-approvals by banks, said Stephen Pang, the HKMA’s senior manager for financial infrastructure development.