Cross-Border Payment Channel: A convenient method for international remittances, but not applicable for Virtual Money withdrawals.

On June 22, the "Cross-Border Payment Link" service between the mainland and Hong Kong was officially launched. This service allows residents of both regions to make instant small remittances without the cumbersome bank procedures; they just need to enter the other party's bank account number or mobile number through a mobile application to complete the operation, greatly simplifying the cross-border payment process.

However, can this convenient service be used for the transfer of funds after virtual money transactions? This article will conduct an in-depth analysis of this.

Basic Features of Cross-Border Payment Channels

Cross-border payment connectivity refers to the interconnection between the "Online Payment Interbank Clearing System" in Mainland China and the "Faster Payment System" in Hong Kong. This service strictly complies with the legal regulations and financial supervisory requirements of both regions, primarily targeting individual users. Northbound remittance (from Hong Kong to Mainland) is limited to Hong Kong identity entities, while Southbound remittance (from Mainland to Hong Kong) is limited to Mainland identity entities.

In terms of limits, Hong Kong residents can remit a maximum of 10,000 Hong Kong dollars to the mainland daily, with an annual limit of 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, this service is not charging fees in the initial stage. In the future, it may expand to various application scenarios such as individual to enterprise, enterprise to individual, and even government to enterprise, at which point a charging mechanism may be introduced.

Hong Kong Virtual Money Withdrawal Model

In Hong Kong, the main methods for withdrawing virtual money are as follows:

1. Offline OTC stores: You can directly exchange mainstream Virtual Money for Hong Kong dollars, but they usually require the use of a local Hong Kong bank account.

2. Licensed Exchanges: Some well-known exchanges allow Virtual Money trading but require users to open an account at the exchange. However, pure mainland residents typically cannot open an account at Hong Kong exchanges.

3. Securities Companies: Some securities companies also offer Virtual Money trading services, but there are similar restrictions on opening accounts for pure mainland residents.

For mainland residents without a Hong Kong work visa or residence proof, OTC shops may be the only viable option for cashing out.

Legal Risks of Using Cross-Border Payment Channels for Fund Withdrawal

Although cross-border payment channels provide a convenient way to transfer funds, using them for fund transfers after virtual money transactions may pose legal risks:

1. Identity Restrictions: The northbound transfers of the cross-border payment system (from Hong Kong to mainland) require the sender to be a Hong Kong resident. Mainland residents, even if they have a Hong Kong bank card, find it difficult to use the "Faster Payment System" to transfer money to mainland bank cards.

2. Scope of Business Limitations: According to the explanations provided by relevant departments, cross-border payment channels are mainly applicable to scenarios such as tuition payments, utility payments, medical treatment, and salary disbursement.

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

4. Bank Review: Although cross-border payment transactions currently do not require detailed business background information, from a compliance perspective, it is not advisable to use this service for the outflow of Virtual Money and the inflow of funds.

Conclusion

As the Hong Kong financial market gradually opens up to Virtual Money, traditional financial institutions have also begun to venture into this field. However, for ordinary investors, especially mainland residents, Virtual Money trading and fund transfers still face many restrictions and potential risks. When using emerging financial services, it is essential to act cautiously and fully understand the relevant laws and regulations to avoid unnecessary legal risks.