Hong Kong Grows eCheck System For Cross-Border Payments

Hong Kong and mainland China are looking to facilitate cross-border trade deals — and their transactions — by turning to electronic payment technology.

Reports on Friday (July 29) by The Asset said the Hong Kong Monetary Authority (HKMA) made a joint announcement with the Guangzhou branch of the People’s Bank of China that sees corporations and individuals using electronic checks to build out a new payment system between Hong Kong and the free trade zones of Guangdong.

Hong Kong rolled out eChecks late last year, reports said, as an electronic alternative to the paper check. They are issued and deposited as PDFs and can be transferred between banks that are onboarded onto the online payment system.

Since the launch of the eChecking system, Hong Kong Interbank Clearing Limited said nearly $540 million has been cleared through this payment rail.

“In view of closer business relationships between Hong Kong and Guangdong, corporates and citizens have an increased need for cross-border payments,” said HKMA Senior Executive Director Howard Lee. “Therefore, it is important to build a mature online payment system between the two jurisdictions.”

In an interview with the publication, HSBC’s Kee Joo Wong, head of Asia-Pacific operations of global liquidity and cash management, said that the eCheck system will enable businesses in the two markets to benefit from faster international payment settlements. According to the executive, the electronic checks issued in Hong Kong can be settled within Guangdong banks by the next business day.

So far, 15 banks have signed onto Hong Kong’s eChecking cross-border payments system for its trial phase; they include HSBC, China Guangfa Bank and ICBC, reports said. The electronic checks can be issued in Hong Kong dollar, U.S. dollar and renminbi (though renminbi-denominated checks are currently unavailable to corporates, according to reports).