Hong Kong customers of Alipay and WeChat Pay, the two dominant cashless payment operators in China, the world’s largest internet market, will be able to transfer funds from each other for the first time, through the Hong Kong Monetary Authority’s Faster Payment System. The service will be available from September 30, but the customers of 10 e-wallet operators as well as 21 banks – including HSBC, Hang Seng Bank, Citibank, Standard Chartered Bank, Bank of East Asia and Bank of China Hong Kong – can now start registering for the service. Hong Kong will take a huge step towards smart banking with introduction of no cost, immediate interbank fund transfers Howard Lee, deputy chief executive of the HKMA, Hong Kong’s de facto central bank, introduced the service on Monday and said: “This is unique worldwide. In all western markets, and on the mainland, only users of the same e-wallet operator can transfer funds among themselves, but not with others. “The Faster Payment System will be a breakthrough in fund transfers and payments in Hong Kong,” he said. Octopus is among the 10 stored-value, or e-wallet, operators that joined the system on Monday, while HSBC’s PayMe mobile payments app will join the service “at the earliest opportunity”, according to a bank spokeswoman. A spokesman in Hong Kong for Alipay, founded by Alibaba Group Holding executive chairman Jack Ma, welcomed the service and said: “Alipay Hong Kong is honoured to be among the first batch of companies to join the Faster Payment System. We are working on partnerships with a number of banks.” Interbank or e-wallet transfers have usually needed a day or two to clear, and some cost up to HK$200 (US$25.5) per transaction. The Faster Payment System will be free and transfers will take place in real time, round the clock, all year round, and even during weekends and public holidays. The transfers can be in Hong Kong dollars as well as yuan, while banks will be able to cap the number of transfers per client. Customers can now register their email or mobile number with their bank or e-wallet operator. They can register with several banks for payments, but can only choose one bank account for receiving money. The system will also let customers use mobile phones to transfer funds to shops via quick response codes. More than 10 retailers have joined the payments service, according to Haster Tang, the CEO of Hong Kong Interbank Clearing, which will run the system. HKMA guidelines on smart banking to help Hong Kong bridge the gap on innovative services with other markets Lee said the Faster Payment System would expand and further develop cross-border transfers between Hong Kong and mainland China. He did not provide details about the capacity of the new service but said it would be “more than enough”. The existing Hong Kong dollar real-time gross settlement system handles HK$920 billion on average per day, while the yuan real-time gross settlement system handles 940 billion yuan (US$136.8 billion) a day. Lee also said he did not see mobile payments turning Hong Kong into a cashless city. “Cash is good. We encourage companies to accept different kinds of payments – from cash and credit cards to mobile payments. These will turn Hong Kong into a smart banking city,” he said. Hong Kong draws 29 applications for virtual bank licences The Faster Payment System is a major project of the HKMA, which is keen on promoting digital banking. Norman Chan Tak-lam, its CEO, said the new service would “make retail payments quicker and easier”. “While it will bring new opportunities to the retail payment industry, it will also promote innovation in financial technology, providing greater convenience and a new experience to the public,” he said. “We’re excited to announce the new system upgrades of WeChat Pay HK. Without a doubt, Hongkongers are no strangers to mobile payment. As more local consumers embrace the mobile wallet as a part of their daily lives, the upgrade is not only an important milestone for WeChat Pay HK, but the entire mobile payment ecosystem in Hong Kong,” said Norman Tam, general manager, Hong Kong and Taiwan, International Business Group, Tencent. Alibaba owns the South China Morning Post .