A New Trend for Fintech - Cross-border Payment


04 Dec 2020

A New Trend for Fintech - Cross-border Payment

In the past few years, financial technology (fintech) has advanced by leaps and bounds, bringing immense convenience to our daily lives. Online shopping, e-payment and transfer as well as online banking services have all become part of our daily routines. At the same time, the technological breakthroughs of recent years have presented turning points in addressing some of the pain points that have long existed in international financial markets.

Fintech is usually associated with payment services. Under the collaborative efforts of the industry and the HKMA, Hong Kong has developed a highly efficient, diversified and inclusive payment ecosystem. Studies and surveys conducted by the industry and international organisations suggest that the share of e-payment in Hong Kong is one of the highest among the world’s developed economies. People in Hong Kong can now make instant fund transfers across different banks or platforms via the Faster Payment System (FPS) in the blink of an eye any time, anywhere. Have you ever wondered that maybe some day, we will also be able to make real-time, cross-border payments in the blink of an eye regardless of where we are?

Although domestic payment services around the world have become highly digitalised, development in cross-border payment is obviously lagging behind. Cross-border payment, with the exception of transactions conducted via the same bank or platform, still runs into common issues such as a long processing time, high cost and low transparency. The reasons behind these problems are widely known, including different time zones, different ways to implement international standards and different technological standards employed by the various payment systems. None of these reasons are new, but the global community is still short of good solutions to properly address the issues.

Last year, under the advocacy of the G20, the international financial community embarked on a comprehensive study on enhancing cross-border payment. Apart from looking at ways of improving the existing mechanisms, the study also explored the application of new fintech solutions to overcome pain points in the financial markets. As an international financial centre, Hong Kong attaches great importance to the provision of highly efficient cross-border payment services. Indeed, the HKMA has been proactive in building the local financial infrastructure so as to provide a multi-currency, multi-dimensional platform that will link up our payment systems with those of the neighbouring regions and international systems to facilitate faster and safer cross-border payment.

Apart from leveraging and continuing to develop the strengths of our existing financial infrastructure, the HKMA is also dedicated to conducting research on the application of the latest fintech solutions to cross-border payment. Last year, the HKMA launched a joint research project with the Bank of Thailand to address the various cross-border payment issues by using central bank digital currencies (CBDC) and a blockchain platform. The research project has entered its second stage, including exploring specific business applications as well as the operability and scalability of the platform to allow the participation of three or more CBDCs.

From a longer-term perspective, we have a good chance of building a regional cross-border payment platform by riding on the global trend of strengthening cooperation in cross-border payment. Our FPS has provided promising opportunities in this regard. While continuing to promote its use locally, the HKMA will also consider leveraging the FPS’ advantages of 24/7 operations and instantaneous payment to enhance cross-border bank remittance services so that corporate and personal account holders in Hong Kong can receive overseas remittances or remit money to destinations abroad more speedily. Linkages with similar faster payment systems in other jurisdictions provide another option to facilitate cross-border payment. We are studying how to make use of the linkages with these systems to allow Hong Kong people to make payment directly through the FPS at overseas tourist hot spots.

Finally, I would like to share with you an encouraging recent development in the work of cross-border payment. The HKMA and the Digital Currency Institute of People’s Bank of China are discussing the technical pilot testing of using e-CNY, the digital renminbi issued by the PBOC, for making cross-border payments, and are making the corresponding technical preparations. As the renminbi is already in use in Hong Kong and the status of e-CNY is the same as cash in circulation, it will bring even greater convenience to Hong Kong and Mainland tourists. While there is not yet a timetable for the launch of e-CNY, it will certainly offer an additional payment option to those in Hong Kong and the Mainland who need to make cross-border consumption.


Eddie Yue
Chief Executive
Hong Kong Monetary Authority

4 December 2020

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Last revision date : 04 December 2020