Hong Kong’s New Faster Payment System Marred By Fraud Claims

Hong Kong’s Faster Payments System (FSP) has only been live for a few weeks, but already it’s facing claims regarding allegations of fraudulent use.

Reports in ejinsight on Thursday (Oct. 25) said the Hong Kong Monetary Authority (HKMA) has received three complaints that the FSP has been used to make fraudulent transactions ranging from $1,280 to $12,750.

One of the complaints, which has been referred to law enforcement officials for further investigation, was made by a woman who said her personal ID and bank account number were stolen and used to initiate a real-time payment using FPS’ Autopay service. In response, the HKMA said it has suspended the Autopay service under FPS.

A spokesperson for the HKMA told reporters that the accusations involve a fraudster stealing personal information to set up an eWallet account and activate electronic direct debit authorization, a feature of FPS that allows users to link bank accounts to eWallets. Reports said the HKMA has stressed that these instances of fraud are not related to a security shortfall within FPS itself, however.

Financial institutions – including HSBC, Bank of China and Hang Seng Bank – are involved in the fraud claims, as are eWallet service providers AlipayHK, Tap & Go and O! ePay. AlipayHK told reporters that it has suspended the electronic direct debit authorization feature of its eWallet under guidance of the HKMA.

The HKMA added that bank account holders are not typically held liable for any fraudulent transfers if they did not authorize a transaction.

Hong Kong’s FPS went live last month. At the time, HSBC Hong Kong CEO Diana Cesar said the system supports faster transactions that can be made “anytime, anywhere, and contributes to the efficiency of businesses by making real-time settlements possible.”

She added that the system brings “unprecedented convenience and security to our daily fund transfers among friends and family, as well as the day-to-day operations of businesses.”