Payment Systems - Hong Kong Monetary Authority

Skip to main content Home / Key Functions / International Financial Centre / Financial Market Infrastructure / Payment Systems Payment Systems

Interbank fund transfers are made through payment systems that are essential components of the financial infrastructure. Hong Kong's payment systems allow interbank transfers in the Hong Kong dollar, US dollar, euro, and renminbi. Hong Kong Interbank Clearing Limited (HKICL) is the operator of the payment systems, providing banks with various interbank clearing and settlement services.

Expand All Collapse All

• Hong Kong Dollar RTGS System

  Introduced in 1996, the Hong Kong dollar Real Time Gross Settlement (RTGS) system (also known as Hong Kong dollar Clearing House Automated Transfer System (CHATS)) enables safe and efficient settlement of interbank payments denominated in the Hong Kong dollar. Interbank payments are settled continuously on a deal-by-deal basis across the book of the HKMA without netting. In addition to settling large-value payments between banks, the system also handles bulk clearing and settlement of cheques, stock market-related payments and other small-value bulk electronic payments, such as EPS, auto-credit and auto-debit transactions, and automatic teller machine transfers. Besides providing interbank payment services, payments arising from the HKMA's monetary operations are also conducted through the Hong Kong dollar RTGS system.

  The Hong Kong dollar RTGS system has a single-tier membership structure. With the Exchange Fund Ordinance providing the legal basis for access to the system, licensed banks in Hong Kong are required to join the system and maintain Hong Kong dollar settlement accounts with the HKMA. Restricted licence banks in Hong Kong may also apply to the HKMA for access to the system, and applications will be assessed against the access criteria set out in the HKMA circulars “Access to the Real Time Gross Settlement System” issued on 29 December 1999 and 19 May 2000. As an on-going effort of the HKMA to eliminate settlement risks for foreign exchange transactions, with the Financial Secretary’s approval, the HKMA allowed the CLS Bank International to have limited access to the system in late 2004 to facilitate the inclusion of the Hong Kong dollar in the foreign exchange transactions to be settled through the Continuous Linked Settlement (CLS) system on a payment-versus-payment basis.

  Disclosure Framework for Hong Kong Dollar RTGS System

  The Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements and the International Organization of Securities Commissions (IOSCO) have jointly issued a disclosure framework and assessment methodology for their principles for financial market infrastructures (PFMIs), which is the latest international standards for financial market infrastructures (FMIs).

  The disclosure framework (DF) is intended to promote consistent and comprehensive public disclosure by FMIs in line with the requirements of the PFMIs. The HKD RTGS system is subject to the DF, and the disclosure report of HKD RTGS system is completed according to the disclosure template outlined in the DF.

• US Dollar RTGS System

  The US dollar RTGS system (also known as US dollar CHATS) was launched in August 2000 with The Hongkong and Shanghai Banking Corporation as its settlement institution. The US dollar RTGS system not only processes US dollar interbank payments on an RTGS basis, but also handles US dollar bulk clearing and settlement of cheques and stock market-related payments.

  Banks in Hong Kong are entitled to access the system and can apply for direct membership through the settlement institution or indirect membership by settling their payments through direct members. Participation of other financial institutions has to be approved by the HKMA and the settlement institution on a case-by-case basis.

• Euro RTGS System

  The euro RTGS system (also known as Euro CHATS) was launched in April 2003 with the Standard Chartered Bank (Hong Kong) Limited as its settlement institution.

  Banks in Hong Kong are entitled to access the system and can apply for direct membership through the settlement institution or indirect membership by settling their payments through direct members. Participation of other financial institutions has to be approved by the HKMA and the settlement institution on a case-by-case basis.

• Renminbi RTGS System

  The renminbi RTGS system (also known as renminbi CHATS) was upgraded from the Renminbi Settlement System in June 2007 with the Bank of China (Hong Kong) Limited as its Clearing Bank. The Clearing Bank maintains a settlement account with the People's Bank of China and is a member of China's National Advanced Payment System (CNAPS). The renminbi RTGS system in Hong Kong can be regarded as a technical extension of CNAPS in Chinese Mainland, but governed by Hong Kong laws. The renminbi RTGS system not only processes renminbi interbank payments on an RTGS basis, but also handles renminbi bulk clearing and settlement of payment items similar to those handled by the Hong Kong dollar RTGS system.

  Banks in Hong Kong and elsewhere can join the system directly by opening renminbi settlement accounts with the Clearing Bank. Non-local banks and financial institutions can also choose to join the system indirectly by settling their payments through direct members in Hong Kong. While banks in Hong Kong can apply to the Clearing Bank for direct access to the system, participation of other financial institutions has to be approved by the HKMA and the Clearing Bank on a case-by-case basis.

• Participants of Hong Kong's Payment Systems

  The following lists of participants are available on the HKICL website:

  • List of Hong Kong Payment System Participants
  • List of US Dollar Payment System Participants
  • List of Euro Payment System Participants
  • List of Renminbi Payment System Participants
  • Full List of Participants of Hong Kong's Payment Systems
• Features of the Payment Systems

  RTGS

  Prior to the introduction of the RTGS system in 1996, banks settled payments among themselves by way of position netting. Such position netting was not obligatory and not supported by a formal legal framework as in the case of obligation netting. A bank paid (or received) only the net difference of the payments payable to (or receivable from) all the other banks participating in the system at the end of each business day. Position netting exposed banks to systemic risk because the failure of one bank to pay the amount due at the end of the day might expose other banks to unexpected payment obligations, triggering a chain of defaults.

  In an RTGS system, large-value interbank payments are settled on a continuous, deal-by-deal basis through the banks' settlement accounts with the settlement institution of the system. As these payments are settled one by one during the day, systemic settlement risks arising from end-of-day netting are eliminated.

  As opposed to position netting, RTGS requires banks to have more intraday liquidity to settle payments during the day. Banks in Hong Kong can obtain interest-free intraday liquidity through intraday repurchase agreements with the HKMA using Exchange Fund Bills and Notes.

  Payment-versus-payment (PvP)

  PvP is a mechanism for settling a foreign exchange transaction where payments in the two currencies involved are settled simultaneously. The Hong Kong dollar, US dollar, euro and renminbi RTGS systems in Hong Kong are interlinked to enable banks to settle US dollar/Hong Kong dollar, US dollar/renminbi, euro/US dollar, euro/Hong Kong dollar, euro/renminbi and renminibi/Hong Kong dollar foreign exchange transactions on a PvP basis. PvP greatly improves settlement efficiency and eliminates settlement risk arising from time lags in transactions and from time-zone differences.

  Settlement Finality

  The settlement of transactions made through the Hong Kong dollar, US dollar, euro and renminbi RTGS systems is final and irrevocable. This finality is protected from insolvency laws and other laws by the Payment Systems and Stored Value Facilities Ordinance.

  Liquidity-saving Tools

  The HKMA has introduced a number of improvements to the RTGS systems over the years to smooth payment flows and enable banks to use liquidity more efficiently. They include:

  • CHATS Optimiser
  • RTGS Liquidity Optimiser
  • Cross-Currency CHATS Optimiser
  • CCASS-related Optimisers

Related Information

• Statistics of clearing transaction volume and value (available on the HKICL website)
• Payment system linkages with other jurisdictions

Press Release(s)

• Payment Systems

Speech(es)

• 14 Dec 2020Opening Remarks at China Shenzhen Fintech Global Summit 2020 (Chinese version)by Edmond Lau, Senior Executive Director, Hong Kong Monetary Authority
• 12 Jun 2014Safe and effective financial infrastructure to serve the public (Chinese Version)by Esmond Lee, Executive Director (Financial Infrastructure), Hong Kong Monetary Authority (Speech at the E-Payment for MPF Transfer system Launching Ceremony)
• 21 Jun 2012Development of Renminbi Offshore Market and Market Infrastructure in Hong Kong (Chinese Version)by Peter Pang, Deputy Chief Executive, Hong Kong Monetary Authority (Speech at a seminar on the Issuance of PRC Renminbi Sovereign Bond and the Development of Hong Kong Bond Market)
• 23 May 2012Renminbi : A New Era and the Role of Hong Kongby Eddie Yue, Deputy Chief Executive, Hong Kong Monetary Authority (Keynote Address at Euromoney Global Offshore RMB Funding Forum 2012)

inSight Article(s)

• 04 Dec 2020Eddie Yue on A New Trend for Fintech - Cross-border Payment
• 12 Feb 2020Eddie Yue on Working Together to Ride Out Challenges
• 20 Aug 2019Norman Chan on Payment and Settlement System and Central Banking
• 17 Sep 2018Norman Chan on Launch of the Faster Payment System

R&M Column (Chinese only)

• 14 Sep 2018Real Time Gross Settlement Systems

Quarterly Bulletin Article(s)

• Sep 2009Renminbi trade settlement pilot scheme (PDF File, 56.3 KB)
• Sep 2009Cross-border trade settlement in renminbi (PDF File, 34.2 KB)
• Jun 2009Multi-currency cross-border payment arrangements between Hong Kong and Mainland China (PDF File, 46.8 KB)
• Mar 2009Interdependencies of payment and settlement systems: the Hong Kong experience (PDF File, 66.7 KB)
• Mar 2008Liquidity and risk management in the RTGS system - the Hong Kong experience (PDF File, 40.0 KB)

Other Topics about Financial Market Infrastructure

• Overview of Financial Infrastructure in Hong Kong
• Debt Securities Settlement System
• System Linkages
• Faster Payment System (FPS)
• Other Retail Payment Infrastructure
• Over-the-Counter Derivatives Trade Repository
• International Co-operation
• Oversight of Financial Market Infrastructures

View All Topics Last revision date : 16 May 2025 Share