Cross-Border Payment: The Use and Limitations of Convenient Financial Tools

Recently, the "Cross-Border Payment Pass" service between the mainland and Hong Kong was officially launched, providing convenient small remittance services for residents of both places. This new service has sparked discussions about its scope and limitations. This article will analyze the characteristics, application scenarios, and related legal risks of the Cross-Border Payment Pass.

Introduction to Cross-Border Payment Channel

Cross-border Payment Gateway is a service that connects the "Online Payment Interbank Clearing System" in the mainland and the "Faster Payment System" in Hong Kong. It is primarily aimed at individual users from both regions, complying with the legal regulations and financial supervision requirements of both places. Northbound remittance (from Hong Kong to the mainland) is restricted to Hong Kong identity subjects, while southbound remittance (from the mainland to Hong Kong) is limited to mainland identity subjects.

In terms of limits, the daily remittance limit for Hong Kong residents to the mainland is 10,000 Hong Kong dollars, and the annual limit is 200,000 Hong Kong dollars. Mainland residents remitting to Hong Kong are subject to an annual foreign exchange facilitation limit of 50,000 US dollars. Currently, several major banks in both the mainland and Hong Kong have launched this service.

Ways to Cash Out Virtual Currency in Hong Kong

In Hong Kong, common methods of cashing out virtual currencies include:

1. Offline OTC stores: You can directly exchange mainstream virtual currencies for Hong Kong dollars, but they usually do not support transfers to mainland bank accounts.

2. Licensed exchanges: such as OSL, HashKey, etc., but pure mainland residents usually cannot open an account.

3. Securities companies: Such as Victory Securities, also have restrictions on opening accounts for pure mainland residents.

For mainland residents without a Hong Kong work visa or residence permit, virtual currency cashing is currently mainly carried out through OTC shops.

Legal Risks of Using Cross-Border Payment Channels

Although cross-border payment channels provide convenience for the transfer of funds across borders, using them for the transfer of monetized funds from virtual currency transactions may pose legal risks:

1. Identity restrictions: Northbound transfers require Hong Kong resident status, and mainland residents find it difficult to use even if they have a Hong Kong bank card.

2. Business Use Restrictions: Cross-border payment channels are primarily applicable for scenarios such as tuition payments for studying abroad, utility payments, medical treatment, and salary distribution.

3. Compliance requirements: Participating institutions must comply with cross-border fund settlement management regulations, fulfill anti-money laundering and other compliance obligations, and monitor suspicious transactions.

4. Bank Review: Although the background information for cross-border payment services is not strictly audited at present, from a compliance perspective, it is not recommended to use it for the cross-border transfer of funds for virtual currency liquidation.

Conclusion

With the opening of the Hong Kong financial market to virtual assets, traditional financial institutions have also begun to enter this field. For example, Guotai Junan International has recently been granted permission to include virtual asset trading services under its securities trading license. This trend has sparked a positive market reaction, indicating a gradual integration of virtual assets with traditional finance.

However, for individual users, when using emerging financial tools such as cross-border payment channels, it is still necessary to carefully consider the relevant regulations and potential risks to ensure the compliance and security of fund flows.