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Real-Time Payments in Hong Kong: 3 Benefits

  • By Timmy Wan
  • Published: 12/14/2018

The Hong Kong Monetary Authority has launched its Faster Payments System. The goal is to achieve real-time payments in Hong Kong. So far, there are three clear benefits to treasury and payments professionals.

Shorter waiting times for payments in Hong Kong? Instant payment in Hong Kong without charges? Yes, these really could happen now that the Hong Kong Monetary Authority recently launched its Faster Payments System. With FPS, payments to and from Hong Kong and the United Kingdom or Singapore only take 15 seconds. By contrast payment clearance occurs without charges in Hong Kong take at least one day to process and sometimes it may take up to three days to complete

The HKMA launched FPS as part of a larger strategy to maintain Hong Kong’s status as a leading international financial center. The existing Hong Kong Interbank Clearing Ltd (HKICL) system has changed from daily batch clearing to real-time processing to achieve faster payments, which allows banks to submit payment requests any time and responds to the payee bank immediately. With the successful transformation, HKICL payment system is currently able to provide payment services in real-time; receive payment instructions from payer banks all day long; process payments immediately; and settle payments to the payee bank almost at the same time.

As HKMA committed to promote instant payments, banks in Hong Kong are expected to align with the new HKICL Faster Payment Model in order to achieve the requirement that inter-banks payments are to be processed, maintaining 7/24/365 service, so that payer banks can submit payments to ICL Core Transaction Service in real time, or near real time. In addition, ICL now provides overlay services that can handle a payer’s phone number or email address that was mapped against the account profile. This means payers can transfer fund only with a payee’s phone or email. The payee bank also will be able to receive the payment’s settlement confirmation from ICL in real-time, or close-to-real-time.

In the first phase of FPS, banks and Stored Value Facilities (SVF) Service Providers are to enhance their payments capabilities, from previously Daily Overnight Batch, to Same Day Hourly Batches. Ultimately, they can reach true real time payment processing. FPS facilitates both person-to-person as well as person-to-merchant service. P2P service includes inter-bank fund transfer in different channels; inter-bank e-cheque payment; ad-hoc, on-demand “request-to-pay” and phone or email bonding to account. While P2M service includes online shopping and registration, SVF instant payment with mobile wallet, digitalized customer payment journey and real-time electronic payment receipt.


In my capacity as a treasury executive, the migration from existing RTGS to new FPS has been seamless. This is because I just need to select FPS (rather than RTGS/ ACH) on the e-banking platform, and then the remittance will go through and settle at FPS.

With the implementation of FPS, the cut-off times for outgoing and incoming payments in different banks are now extended, which enable faster funds settlement for me to allocate the funds within same day. For example, in the past, the HK dollar Real-Time Gross Settlement (RTGS) system cut-off at 6 pm but now, with FPS, the same-day HK dollar transfer cut-off extends to 11 pm. Moreover, compared to RTGS, FPS incurs no charges for remittance. It reduces my time to monitor the accuracy of bank charges and related costs.

FPS also allows more remittance information to go through the system. For example, the field length of beneficiary name increases from 20 to 70 characters. Previously, if the beneficiary name is longer than 20 characters, the usual practice is that the excessive part will be entered at beneficiary address on e-banking platform. But sometimes the banks may misunderstand this “address” and do not put it back together with the beneficiary name. It leads to fund settlement delay after the wrong remittance information is released. This problem will hopefully be solved with the increased field length in FPS.

Timmy Wan is a treasury executive with Techtronic Industries in Hong Kong.

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