In a groundbreaking move aimed at expediting digital transformation and fostering increased business opportunities, authorities in Hong Kong and Thailand have announced a new initiative enabling tourists to use their domestic real-time settlement payment systems while traveling between the two countries.
Commencing next Monday, Hong Kong residents visiting Thailand will have the convenience of using their smartphones to make payments for shopping and dining through the Faster Payment System (FPS), with a daily limit of HK$10,000 (US$1,280). In a reciprocal agreement, Thai visitors to Hong Kong will be able to utilize PromptPay, with a daily limit of 500,000 baht (US$14,200), at merchants accepting QR code payments. This collaborative effort between the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand is set to revolutionize cross-border retail payments, offering a seamless and user-friendly experience.
The FPS and PromptPay systems, connecting traditional banks with electronic payment and digital wallet operators, mark a significant stride towards efficient cross-border transactions. Howard Lee, Deputy Chief Executive of HKMA, mentioned plans to raise the maximum daily limit in the future based on utilization. Hong Kong tourists frequently choose Thailand as a destination, and the country has a robust history of cross-border linkages in faster payment systems.
The linkage between cross-border payment systems is facilitated by settlement banks, with HSBC and Bangkok Bank playing key roles. Luanne Lim, Chief Executive of HSBC Hong Kong, expressed confidence in the well-established payment infrastructure, citing over 40% year-on-year growth in merchant transaction volume through FPS in the first half of 2023.
Under this agreement, seven banks and two stored value facility (SVF) operators in Hong Kong, including HSBC, Bank of China Hong Kong, and Citibank Hong Kong, will participate. This collaboration signifies the initial step towards interconnecting real-time payment systems in Hong Kong and Southeast Asia, fostering convenient cross-border payment methods and stimulating digital transformation and new business opportunities for local merchants.
On the Thai side, five banks covering around 90% of PromptPay merchants will support payments from Hong Kong tourists scanning PromptPay QR codes. Hong Kong tourists will be able to use their smartphones for FPS payments based on real-time foreign exchange rates.
PromptPay, covering 8.5 million merchants in Thailand with a daily average of 55 million transactions in 2022, and Hong Kong’s FPS, launched in September 2018 with 12.6 million registrations as of June 2023, are established systems that have paved the way for this groundbreaking collaboration.
Before the pandemic, Thailand welcomed an average of 900,000 visitors annually from Hong Kong, with over 500,000 Thai tourists visiting Hong Kong. With the easing of Covid-19 restrictions, travel between the two destinations has surged, and Thailand anticipates a remarkable 1,840% increase in international visitors between July and December 2023, reaching 7.5 million. This initiative not only enhances the travel experience for tourists but also signifies a bold leap in the realms of financial technology and cross-border collaboration for these two vibrant economies.
(Source: Salina Li | SCMP)
