Source: Financial Alliance.
Author: Guo Zishuo
① There are differences in service time, transfer amount limits, and other aspects among the pilot Institutions in both places.
② The cross-border payment integration business scenarios cover three core areas, primarily focusing on person-to-person transactions. ③ During the pilot period, many Banks waived fees, and some pilot Institutions for 'southbound remittance business' even offered various incentives to capture the 'cross-border payment integration' market.
The People's Bank of China and the Hong Kong Monetary Authority jointly announced on June 20 that the interconnection of the Mainland and Hong Kong Rapid Payment System (referred to as Cross-border Payment) will officially launch on June 22. At that time, residents of both regions can complete real-time small cross-border remittances simply by using the recipient's mobile phone number or Bank Account, breaking through the time constraints of traditional cross-border remittances.
Currently, the first batch of participants in cross-border payment integration includes 12 Institutions, among which the CSI China Mainland Banks Index includes. $ICBC (01398.HK)$、 $ABC (01288.HK)$、 $BANK OF CHINA (03988.HK)$、 $CCB (00939.HK)$、 $BANKCOMM (03328.HK)$Five major state-owned banks and CM BANK; Hong Kong Institutions include $BOC HONG KONG (02388.HK)$、 $BANK OF E ASIA (00023.HK)$Bank Of China, $HANG SENG BANK (00011.HK)$, HSBC HONG KONG, Industrial And Commercial Bank Of China in Asia, will gradually expand the participation scope in the future.
According to reporters from Bank Of Communications, HSBC HONG KONG, HANG SENG BANK, BANK OF E ASIA and other pilot Institutions, there are differences in service hours and remittance amount limits between the two regions' pilot Institutions. Some pilot Institutions have disclosed the regional pilot timetable. Meanwhile, during the pilot period, many banks waive handling fees, and some 'southbound convenient remittance business' pilot Institutions are even creatively offering rewards to seize the 'cross-border payment channel' market.
The two regions have differentiated rules: amount limits and service hours vary.
Regarding service details, there are differentiated rules for institutions in the two regions: remittances from Hong Kong to mainland China support 24-hour service, while service time for mainland to Hong Kong is from 7 AM to 11 PM daily.
In terms of amounts, the limit for transfers from Hong Kong to mainland China is HKD 0.01 million per person per day, with an annual limit of HKD 200,000 (calculated per participating institution, independent of the current daily CNY 0.08 million same-name remittance limit); the personal annual currency purchase facilitation limit from mainland to Hong Kong is USD 0.05 million.
According to reporters from the Financial Association News, HSBC Hong Kong learned that at the initial stage of the measure, there would be no limit on the receipt of amounts for expenses related to education, medical care, and utility bill payments.
Some pilot institutions have disclosed their business layout timetable. Agricultural Bank of China will launch the pilot in Shenzhen on June 22, expand to Guangdong and Hainan in July, and subsequently roll it out nationwide.
Currently, cross-border payment business scenarios cover three major core areas, primarily individual-to-individual: the 'southbound facilitative remittance business' from domestic individuals to bank accounts in Hong Kong allows for remittance in CNY, and receiving in CNY or HKD; the 'northbound facilitative remittance business' allows individuals in Hong Kong to remit to bank accounts in mainland China with options in HKD or CNY for remittance, and receiving in CNY. Additionally, it includes scenarios for study payment, utility fees, salary payment, and other personal and institutional 'two-way cross-border RMB payment'.
Is there a fee waiver during the pilot period? Plus rewards.
A responsible official from the People's Bank of China indicated that the cross-border payment system with Hong Kong effectively shortens the cross-border remittance chain and improves remittance efficiency. Notably, it 'reduces intermediate steps and lowers cross-border remittance costs'.
Based on this, during the pilot phase, multiple pilot institutions, including HANG SENG BANK, Industrial And Commercial Bank Of China, and China Construction Bank Corporation, have also announced plans to 'waive fees'. China Construction Bank Corporation stated that customers could directly use Faster Payment System through 'cross-border payment system' to instantly transfer RMB to designated bank accounts in mainland China, and also receive RMB or HKD remittances from mainland banks via Faster Payment System without incurring any handling fees.
At the same time, Agricultural Bank Of China and Bank Of Communications became the first state-owned banks to announce "waiving fees". "Compared to traditional cross-border remittance services, cross-border payments are 'instant,' and fees will be waived during the pilot period." Agricultural Bank Of China pointed out that customers can access the "Cross-border Payment Link" interface through Agricultural Bank Of China's mobile banking, fill in remittance information, and handle real-time cross-border remittances. The currencies supported for receiving funds are RMB and HKD, covering various livelihood scenarios such as tuition payments, medical fees, and wage subsidies.
Moreover, multiple pilot Institutions for the "Southbound Convenient Remittance Service" are competing to attract customers to the "Cross-border Payment Link" market with various rewards. China Jianyin Investment and HSBC Hong Kong have launched a transfer reward activity. From June 22 to August 31, Jianyin Asia customers who set Jianyin Asia as their designated receiving bank on Faster Payment System and complete a single transfer of 1,000 HKD/CNY or more may receive a cash reward of 100 HKD.
HSBC Hong Kong indicated that eligible customers receiving at least 1,000 HKD or 1,000 RMB through the "Cross-border Payment Link" can receive a $10 reward. Valid until September 30, 2025.
Chen Liming, Vice President of Jianyin Asia, stated that since the launch of Faster Payment System, Jianyin Asia's transfer transaction volume has maintained rapid growth. The transaction volume through "Faster Payment System" is expected to grow by more than 40% year-on-year in 2024. With the official launch of the cross-border payment link, a new peak of growth in cross-border payment business is anticipated.
Editor/melody
