Hong Kong hits major fintech milestone as half the city’s population signs up for HKMA’s Faster Payment System

Hong Kong residents can expect to benefit from cheaper and better banking services with the launch of more virtual banks this year, according to high-profile speakers at the Asian Financial Forum.

Their comments came as it was revealed the Hong Kong Monetary Authority has hit an important milestone in its efforts to promote financial technology (fintech). Half the population of the city has now signed up to its Faster Payment System, which enables the free transfer of money between bank accounts via mobile phone.

The development shows Hong Kong is moving quickly into a new era of branchless banking, a shift that brings up challenges for traditional lenders which must innovate to cope with the competition, said officials at the annual conference held by the Hong Kong government.

“The Faster Payment System is an important move for the city to develop its fintech. The system has been very popular with the Hong Kong public,” said James Lau, Secretary for Financial Services and the Treasury during a panel discussion at the forum on Monday.

The electronic interbank payment system introduced by the HKMA in September 2018 now has half of the local population registered and average daily transaction volumes of between HK$2.4 billion (US$308.82 million) and 38 million yuan, Lau said. The system allows anyone to sign up with their mobile phone number or email address and transfer money between different bank accounts. They can also make payments at shops and restaurants using QR codes on their smartphones.

“The next major development is the launch of more virtual banks in the first quarter of this year in Hong Kong, which will provide more online banking services to the public,” Lau said.

The Hong Kong Monetary Authority has issued eight virtual bank licences since March last year. The first virtual lender, ZA Bank, started operating in December.