Instant payments
—the ability to complete transactions within seconds—are revolutionizing financial management for merchants in Hong Kong. Since the launch of Payment Connect in June 2025, linking Hong Kong’s Faster Payment System (FPS) with mainland China’s Internet Banking Payment System (IBPS), we’ve seen a significant surge in instant payment volumes. According to market data, this growth is driven not only by individual consumers but also by businesses, particularly merchants in business-to-consumer (B2C) sectors leveraging FPS for seamless, rapid transactions.
New Opportunities for B2B and Treasury Payments
We expect instant payments to become even more critical in business-to-business (B2B) models and merchant treasury functions. Payment Connect currently supports cross-border personal remittances up to HK$10,000 per day per linked account, enabling merchants to more flexibly handle supplier settlements, acquisitions, licensing fees, and even tax payments—transactions previously constrained by slower traditional systems.
The key advantage of instant payments is their elimination of the early cut-off times associated with traditional Clearing House Automated Transfer System (CHATS) or high-value payment systems. This allows merchant treasury teams to process transactions later in the day, resulting in:
- Optimized Liquidity Management: Greater flexibility in fund allocation, reducing reliance on short-term borrowing.
- Simplified Cash Flow Forecasting: Real-time settlements provide more accurate financial data.
- Enhanced Efficiency: No need to wait for lengthy settlement cycles, accelerating business operations.
The Potential and Challenges of Cross-Border instance Payments
Cross-border payments are a cornerstone of global trade, with a revenue pool projected at USD 230 billion in 2025. However, high costs and settlement delays have long been pain points for merchants, particularly in scenarios like sourcing inventory from mainland suppliers or facilitating peer-to-peer (P2P) remittances for staff. Settlement speed is critical, prompting increased innovation from global entities like Swift, the Bank for International Settlements (BIS), and private sector players.
According to a recent GlobalData survey, 90% of Hong Kong residents use mobile wallets for payments, a trend that directly boosts merchant transaction volumes and encourages broader adoption of instant payments. As a region with robust domestic payment infrastructure, Hong Kong is at the forefront of the cross-border instant payment revolution.
Modernization of Payment Infrastructure
Globally, payment infrastructure modernization is accelerating. Key developments include:
- Regional Connectivity: Payment Connect links Hong Kong’s FPS with China’s IBPS for real-time remittances, showing great promise despite initial low-value limits. Similarly, Malaysia’s Real-Time Retail Payments Platform (RPP) and Singapore’s Fast and Secure Transfers (FAST) are connected under Project Nexus.
- Private Sector Innovation: Traditional banks like HSBC and DBS, alongside innovators like Wise, are building new payment networks offered as services.
- Stablecoin Applications: Real-time cross-border payment solutions using public stablecoins (e.g., USDC, USDT) and private stablecoins (e.g., XRP, PYUSD) are gaining traction in fintech and may eventually be adopted by more banks and merchants.
Merchants’ True Needs: Price and Experience
While innovations in payment infrastructure are noteworthy, Hong Kong merchants prioritize price and user experience. Market feedback indicates that successful payment solutions must be tailored to specific merchant needs, such as:
- Rapid Cross-Border Trade with Mainland China: Ensuring smooth supply chain cash flows.
- Efficient B2C Retail Cash Flows: Enhancing consumer payment experiences to drive transaction volumes.
Conclusion
Instant payments are reshaping how Hong Kong merchants operate. With technological advancements, regulatory support, and evolving market demands, merchants should seize this opportunity to enhance their competitiveness. Whether optimizing internal financial processes or delivering seamless customer experiences, merchants who master instant payments will stand out in the future marketplace.