Refined Measures on Real-Time Fund Transfers Made by Customers

Our Ref: B1/15C
B9/67C
18 February 2025
The Chief Executive
All Authorized Institutions
Dear Sir / Madam,
Refined Measures on Real-Time Fund Transfers Made by Customers I am writing to set out refined measures that Authorized Institutions (AIs) should adopt in respect of real-time fund transfers made by customers. Faster Payment System (FPS) and intra-bank fund transfer systems of some AIs enable fund transfers to be effected on a real-time basis. This offers greater convenience and better efficiency of fund transfers to bank customers. However, from time to time, some bank customers make errors when they input their transfer instructions in Internet banking platforms and mobile applications. In particular, there are situations where a bank customer (the “payer”) erroneously inputs the bank account number of the intended recipient (the “payee”), which is used as the identifier for effecting the fund transfer. Once the erroneous fund transfer is effected, it is not likely that the payer can stop the fund transfer. While bank customers have their part to play in ensuring correct inputs of their fund transfer instructions, measures adopted by AIs can also help reduce chances of incorrect fund transfers made by customers. In the circular “Enhanced Measures on Real-Time Fund Transfers Made by Customers” issued by the Hong Kong Monetary Authority (HKMA) on 21 December 2021 (“2021 circular”), the HKMA required AIs acting as payee institutions to conduct a mandatory name matching process on fund transfers effected on a real-time basis through the FPS and intra-bank fund transfers of similar nature, in situations where a payer inputs the payee’s bank account number which is used as the identifier for effecting the fund transfer, and the transaction amount is of HK$10,000 (or other currencies of an equivalent amount) or above.

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  This measure has significantly reduced instances of erroneous fund transfer made by customers inputting wrong bank account numbers. It has also helped detect scams as the payee’s name must be made known to the payer in order to receive payments. Nonetheless, it has come to the attention of the HKMA that some scammers pretended to be reputable merchants and deceived customers into making real-time fund transfers below HK$10,000 to evade the name matching process. In view of the above, the HKMA encourages AIs to conduct mandatory name matching process for all applicable fund transfers irrespective of the transaction amount. In case AIs wish to set a threshold for conducting the mandatory name matching process balancing considerations of operational efficiency, convenience to customers and objective of minimising impact of incorrect transfer, the HKMA considers that such threshold should not be higher than HK$1,000 (or other currencies of an equivalent amount). Other arrangements in the 2021 circular are largely unchanged, and the details are summarised at
  Annex.
  AIs are expected to implement the refined measures set out in this Circular by 31 May 2025. This Circular supersedes the 2021 circular. Should you have any questions regarding this Circular, please feel free to contact Ms Cherry Yip on 2597-0495 or Mr Michael Leung on 2878-1186. Yours faithfully, Alan Au Executive Director (Banking Conduct) c.c. The Chairman, The Hong Kong Association of Banks The Chairman, The DTC Association Secretary for Financial Services and the Treasury (Attn: Ms Tanna Chong)

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  Annex
  Refined Measures on Real-Time Fund Transfers Made by Customers Coverage The refined measures are applicable to fund transfers effected on a real-time basis through “Type C1 credit transfers 1” of the Faster Payment System (FPS) and intra-bank fund transfers of similar nature, in situations where a payer inputs the payee’s bank account number which is used as the identifier for effecting the fund transfer. For the avoidance of doubt, the refined measures are not applicable to “Type C2 and C3 credit transfers 2 ” and other fund transfer types of FPS. Mandatory Name Matching Process AIs acting as payee institutions are encouraged to conduct mandatory name matching process for all applicable fund transfers irrespective of the transaction amount. In case AIs wish to set a threshold for conducting the mandatory name matching process balancing considerations of operational efficiency, convenience to customers and objective of minimising impact of incorrect transfer, the HKMA considers that such threshold should not be higher than HK$1,000 (or other currencies of an equivalent amount). Transfer instructions that cannot pass the mandatory name matching process will be rejected by the payee institutions, and the payer institutions should inform the payer that the transfer instruction is unsuccessful or rejected. For the avoidance of doubt, AIs can adopt a risk-based approach for and design their own matching logics / algorithms (which may not necessarily mean exact matching) of the mandatory name matching process. For intra-bank fund transfers, instead of name matching process, AIs may choose to adopt similarly effective measures, such as displaying partially-masked payee 1 According to the “Operating Procedures for FPS Core Services” issued by the Hong Kong Interbank Clearing Limited (HKICL), “Type C1 credit transfer” is a real-time credit transfer service. It is designed for high priority payment services where the payee needs to confirm receipt of funds in a very short time, such as P2P payment via mobile applications. 2 “Type C2 credit transfer” is a general purpose “as soon as possible” credit transfer service, where there is no urgency for payee to confirm receipts of funds in a very short time but still prefers the payment to be handled as soon as practicable. “Type C3 credit transfer” is a bulk credit transfer service. It is most suitable for low priority payment that are not time critical such as monthly salary payments.

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  name of the inputted bank account to the payer before the fund transfer is confirmed, to achieve the same purpose. Customer Reminder After payers have inputted the payment instructions in Internet banking platforms or mobile applications, AIs acting as the payer institutions should display the following reminder 3 to the payers in a clear and prominent manner before a fund transfer is confirmed:
  “Name checking may not be conducted in the fund transfer. Please carefully verify the payee’s account number and other payment details.” “轉帳時，收款人名稱或不會被覆核。請小心核對收款人户口號碼及 其他付款資料。” Customer Communication Upon implementation of the refined measures, AIs are encouraged to conduct appropriate customer communication to inform customers of the change and refresh their understanding on the name-matching process adopted by the industry on the relevant fund transfers, including the following:
  (a) When a payer makes a real-time fund transfer through FPS, the payer should carefully verify the payment details, including, among others, the payee’s name and account number, etc. It is not likely that the payer can stop a transfer after it has been effected. (b) Where (i) a payer inputs the payee’s bank account number as the identifier and (ii) the payee institution is a retail bank, fund transfers of HK$1,000 or above (or other currencies of an equivalent amount) will generally be subject to AIs’ own name checking process. (c) In other cases such as fund transfers of less than HK$1,000 (or other currencies of an equivalent amount) or the payee institution is not a retail bank, name checking process may not be conducted. 3 For intra-bank fund transfers, AIs adopting similarly effective measures as the alternative for name matching (such as displaying partially-masked payee name of the inputted bank account to the payer before the fund transfer is confirmed) may suitably adapt their message to remind customers to carefully verify the payment details.